INDIA’S TROUBLES NATURAL AND MAN MADE DISASTERS AFFLICT NATION

Press, Volume CV, Issue 30956, 12 January 1966, Page 10

INDIA’S TROUBLES NATURAL AND MAN MADE DISASTERS AFFLICT NATION

... ... h - (Reprinted from “The Times )

India is now face to face with her most serious economic crisis since the war The failure of the monsoons —the worst in hung memory has aheadv’led to food rationing in areas where there may be just enough to go round Elsewhere the coming months could bring the acutest shortage of rice and wheat and the worst famine since 1943. And to last year’s natural disasters have to be added set era! manmade ones The conflict with Pakistan has brought its own trail of trouble. ZartftSn theobSous wastage in a hungry coun to choose gns instead of bread the political repercussions of the -1 aay war nave oeen stm more severe The United States immediately suspended aid even Si' that she had promised, and Britain withdrew her moral support and put up an irritating smoke-screen about arms supplies.

The economic results of this series of blows are becoming all too clear. Parts of India must prepare for famine and starvation. Industry is short of power because lack of water not only rums crops but also deprives the hydro-electric plants. The hotels in Madras are haying to cut down on both food and electricity. Imports of raw materials, components, and spare parts, already cut to the bone because of the shortage of foreign exchange, are having to be restricted even further because of the absence of American aid. As a result industry is working hand to mouth. Newspapers have Imposed a voluntary cut of 15 per cent on their consumption of newsprint. Shortage of alloy steel has led to a drop of 20 per cent in the output of watches from the Govern-ment-run Hindustan Machine Tools Company. Other firms dependent on imported copper, special steels, foreignmade components and spare parts are similarly threatened with idle capacity and rising unemployment. Prospects are grim and industrialists even grimmer.

Credit Squeeze To an official credit squeeze, intended to damp down inflation, have been added physical shortages that threaten to damp down production. In these conditions it is hardly surprising that the biggest casualty of all is India’s fourth five-year plan, due to start on April 1. Talk in Delhi is now of a oneyear plan for 1966-67 and a revival of the five-year concept (within the original framework of 1966-70) when the time and conditions allow. Without any assurances about the volume of foreign aid, no significant forward planning can be undertaken and domestic priorities will need sharp revision. This catalogue of troubles is easy to outline on paper. But only in India can the real depth of the crisis be fully felt. Belt-tightening can be undertaken in hotels and restaurants and “riceless” and “meatless” days are becoming common. But belt-tightening for the masses still living in the streets of Bombay and Calcutta or in the villages can mean only one thing: millions will be pushed to the verge of starvation. This is the threat for the next few months.

Deeply Hurt At present, the problem Is as much psychological as economic. India has been deeply hurt, as much by her apparent friends as by her plain enemies. She has faced famine before. She has faced enemies before. What she is finding difficult to accept Is that what she regarded as partners in her economic attempt to reach self-sustain-ing growth have let her down

—for political motives, not economic. The consequences can be seen all over India. In Delhi there has been political anger, anger against the United States for doing what she always warned India that Russia would do —stopping aid overnight for political motives: and anger against themselves for getting India into such a reliant posture.

The result has been a growing determination to “go it alone” whatever the cost. And the cost can be. inevitably must be, grievously high both for the Government and the people. India rightly wants to show her independence. The trouble is that she is desperately in need of foreign wheat and rice: and just as dependent on foreign aid —whether to pay off old debts, to finance rew projects, in agriculture as well as in industry, or simply keep industry running with a steady flow of spares and components. While the United States has generously offered immediate supplies of food, she has still to resume normal financial aid. “If all this means a lack of economic growth for two years,” one minister told me, “so be it. If there are still further shortages, that we must get used to. If millions starve, as they did once before when foreign supplies were interrupted, that too we must accept.” And, he added in a different tone, if all this becomes really necessary antiAmericanism will not need encouraging by politicians in Delhi.

Strong Words These were strong emotional words. They were uttered in the middle of December at what may have been the height of the psychological crisis. But similar words could be heard outside the capital. Almost everywhere Britain’s actions brought their own peculiar response. From state Ministers in Bombay, Bangalore, Madras, and Calcutta to small industrialists both in the north and south, the complaints were much the same. Britain had not only failed to give India moral support during the Pakistan conflict; both

the London press and the Government had branded India as an aggressor and Mr Wilson had been over-hasty in his judgments. In practical, economic terms Britain had held up arms supplies, even supplies already paid for in good faith and, for a short period, seemed about to suspend aid too.

Yet by the second half of December most of the disappointments were beginning to be tinged with sorrow rather than anger. Efforts were already being made to mend political fences with the west. Britain was showing some keenness to bring clarity to the muddle over arms supplies; the London press, in Indian eyes, was beginning to get closer to the truth: and there was even talk in Dehli of a visit from Mr Wilson.

Painful Mistakes

British inflicted sears seemed to be healing, but the conflict with the United States was no nearer solution. The truth is that no-one yet knows on what terms American financial aid will be resumed. And until this is known, any resumption of aid talks for 1966-1967 among India’s other creditors (including Britain) is plainly out of the question. If this were a pure economic dialogue, the Americans would find ready listeners in Delhi to any of their criticisms. Already there is recognition that painful mistakes have been made in the last 10 years: too much emphasis on rapid industrialisation, too little attention to agriculture, irrigation, population control.

But it is not an economic discussion that is needed to get affairs moving again American aid now openly has political strings attached, and the attachments of those strings seem to be known to only one man—President Johnson. Until he speaks neither the economic planners in Delhi, industrialists throughout India, nor India's other creditors (including Britain) can make any significant moves. But if he leaves it too late, or pitches his price too high, the consequences could be grave.