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DEVELOPMENT PROGRAMME OF INDIA

Administration of the Programme ,11. In India the administration responsible for the execution of the programme has had considerable experience with problems of development. The plans of individual Ministries and States are examined by the Planning Commission which is drawn from Government, industry and labour. This Commission advises the Government, and maintains liaison with all sections of the public. Financial control over expenditure is secured through scrutiny by the Ministry of Finance of minor schemes of development and by the Economic Committee of the Cabinet, or the Cabinet itself in the case of more important schemes. Parliamentary control over expenditure is exercised by the Standing Finance Committee Whose approval is necessary for all schemes involving a non-recurrent expenditure of more than R5.500,000 or a recurrent expenditure of more than Rs. 100,000 per annum. There is also an Estimates Committee which scrutinises in detail all government expenditure included in the Budget. There is close collaboration between the Central Government and the States not only on the broad objectives of economic policy, but also on the particular schemes of development which the States may undertake from time to time. Examples of financial co-operation between the Central Government and the States are afforded by land reclamation schemes and the Damodar Valley Corporation. Co-operation between the Government and private enterprise is shown in enterprises like the Shipping Corporation and Air-India International in which there is substantial participation by private investors. Government and Private Investment 12. Private investment, both foreign and domestic, is earnestly welcomed in India as a means of development., The size of foreign investment in relation to total investment is large. According to the census recently conducted by the Reserve Bank of India, the market value of total long-term private foreign investment is R5.5,190 million (£389 million). British investment is valued at R5.3,760 million (£282 million)—about 70 per cent, of the total—and United States investment at R5.300 million (£22 million). The predominant element in this foreign investment is ' direct' investment in Which control of operation is associated with ownership of capital; this is put at R5.4,310 million (£323 million). 13. The scope for making conditions of investment more attractive to foreign investors is under continuous examination by the Government. Their power with respect to the admission of new foreign enterprises is for the most part exercised only for the purpose of preventing over-investment in certain crowded sectors of the economy. The control of capital issues applies only to joint-stock companies with a capital of over R5.500,000 (£37,500)— a substantial figure in the scale of investments in India. Only a few specified industries like the manufacture of munitions are reserved to the Government. In certain special fields of national importance, such as civil aviation and shipping, private enterprise is encouraged to participate with the Government in semi-public corporations. The full current earnings of all foreign enterprises may be freely remitted abroad under the existing exchange control regulations. The Government have decided that investment from hard currency areas shall be treated in much the same way as investment from the sterling area, and investors from these areas are allowed to repatriate in full not only the original capital invested in approved projects after January, 1950, but also any profits which may be ploughed back into the business. To stimulate domestic and foreign private investment a number of concessions have been made by way of tax reliefs and more liberal depreciation allowances. 14. Most of the investment contemplated in the programme is in the public sector, since the plan concentrates on basic development in irrigation, transport and rural electrification. As the projects make progress and new lands