Evening star., 1959-06-07

HiliiiUu tOnS OF gram, AMERICAN
shipments are now running at q
higher rate than q year ago to
satisfy needs Of the large popula-
ton centers. For In India the vast
population increase Of 2 per cent
or Q million persons per year re-
quires an annual additional mil
lion tons Of grain.
Although midas food require
ments are tremendous In view Of
such widespread food shortages =
and undernourishment. and far
greater than the amounts avail.
able. india cannot absorb unlim- ,
tied United States food surpluses.
Port facilities are limited and have.
been severely strained during the
last two years unloading SOC. 1000.
tons per month. Also. India's
internal distribution and transport
tation system cannot handle q
larger volume Of imported foods.-
India would not wish to be too
dependent on American agricul-
tural commodities nor would :.
United States policy favor any
such reliance which would tend TO
discourage Indian development Of
her own agricultural production.
These millions Of tons Of Ameri-
can agricultural products are vital
to India for more than purely
humanitarian reasons. As indus
trial development increases with
rising consumer purchasing power.
more food and fiber products ara.
required. As more people go to-
work. their first expenditures are
for food and clothing. II such
agricultural supplies do not rise.
ruinous imitation results. Senator
Hubert H. Humphrey has pointed
out. insufficient food in India has
produced imitation. and infiationc
can torpedo economic develop
ment." Since there Is inadequate.
food production in India despite
continuing efforts to raise IT,
American surplus food and fibery
supplies perform an important.
function in countering imitation.
In addition, by not having to use
precious foreign exchange to NJ
nance agricultural imports now,
received from the United States..
India can devote these resources,
to the purchase Of capital goods.
and other essential requirements
for her economic improvement"
Building Indion Economy I'D.
Not only are United States
farm surpluses necessary for
India's food and clothing require
ments but they have an additional
value in that the rupees which
the Indian government pays for
them are used for the country's
economic development. OF the
s65S million worth Of rupees
available, 1884 million are to be I
loaned by mutual agreement TO-
India in order to build up her
economy. So far some $3.50 mil
lion worth Of rupees have been
loaned to the Indian government
at 4 per cent interest for these
projects: sir
1. $193.6 million worth of rupees
have been allocated for 13 river
valley development projects. These
power and irrigation programs. {,
which had already been started
with Indian, International Bank
and United States foreign aid
funds. are located in various
states such as Madhja. Pradesh,
Madras. Bombay and Mysore.
Most Of them, vital to raising
India's agricultural and indus
trial production. will require sew.
eral years to complete. r--
2. A reflnance corporation was
established a year ago with 4
membership Of IA Indian private |
banking institutions. This cor.
poration. into which the United
States put SIS million worth Of
rupees and Indian private banks
$25 million, will rediscount loans
made by the participating banks
to private medium-size industry
for developmental purposes for q
three to seven year period. The
list OF 81 eligible industries in.
clude those in iron and steel.
chemicals. ferro manganese,
cement, jute manufacture, drugs.
electric motors. dye-stuffs, etc. Up
to last December seven applica-
tions had been received for 81 mil.
lion worth Of loans in such in
dustries as cotton textiles, elec.
trical goods. cement, drugs ana
ferro-manganeSe. No single in.
dustrial firm can borrow mora
than 81 million in rupees.
The refinance corporation fills
a gap in the Indian private bank
ing system because medium term
industrial financing has not been
available from private commercial
banks.
Encourages Investments n
An amendment to the law pro:
vides that in India $73.9 million
worth Of rupees be loaned to pri,
vate American corporations or
their Indian affiliates. Conceived
as a device to encourage United
States private investment abroad.
these rupee funds would, by sup
plying working capital and money
Tor factory construction, make It
easier for such firms to expand
their business development and
trade operations. So far applica,
tions from United States COM
panies in the tire and truck, ele.
vator. glue manufacturing. steel
strapping and piston ring indus.
tries would only use up about one,
NTH Of the rupees available. M.
Several million dollars worth Of
rupees have been allocated for
United States educational and
cultural activities. At present
the State Department uses this
money to operate the Fulbrighti
educational exchange program
and hopes to expand Indian {
leader-specialist travel grants
with these funds. Also IL plans