Aid for India

Part of the debate – in the House of Commons at 12:00 am on 15th April 1965.

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Photo of Dr David Kerr Dr David Kerr , Wandsworth Central 12:00 am, 15th April 1965

The House owes a considerable debt to the right hon. Member for Birmingham, Handsworth (Sir E. Boyle), first, for the compassion which he showed towards the Indian people and the problems they are facing, and, secondly, for the skill, depth and range of the knowledge with which he displayed that compassion.

In considering the problem of aid to India, one cannot but help being struck by the similarities of Britain and other great countries which are facing the future; the situation in which a great capitalist economy is striving, very slowly and quite openly, to metamorphose to a Socialist economy. The right hon. Gentleman referred to the very low per capita income of India. In fact, it is only £25 a year now and even when the next Five-Year Plan is completed it is aimed to rise no higher than £29. Frankly, the difference between £25 and £29 as a per capita income is difficult for us to perceive. I am not sure how much it means to the Indian at the very lowest level of income, who, as the right hon. Gentleman pointed out, receives less than 20 rupees a month, or less than 30s.

The Budget has granted a development rebate of 25 per cent. for certain priority industries, to come into effect in April, 1967, but the criticism has been levelled that the list of these priority industries is both too short and arbitrary. Prior to the Budget there was a rise in import duties. It is not, however, insignificant to note that these increases were accepted in three important cases—food grains, fertilisers and family planning accessories.

In looking at the similarities one finds that India is enjoying a Bank Rate as high as 6 per cent. Meanwhile, her balance of payments difficulty corresponds to ours. I understand that her reserves are close to the statutory minimum of £150 million, while the International Monetary Fund and the Aid India Consortium—which is a group of Atlantic communities anxious to provide assistance to India—are expected to provide support in terms of foreign investment and exchange, to which the right hon. Gentleman referred as of equal importance.

None the less, in looking at the problem of aid for India, I re-emphasise—elaborate, perhaps—the right hon. Gentleman's suggestion that we need to look at the sort of ways in which we are helping the under-developed countries. The demands from the emerging countries for assistance not only cannot go unheard by the affluent and industrial countries, but we have a responsibility to remember that our affluence is increasing proportionately and absolutely much faster than the wealth and resources of the under-developed countries.

This leads me inexorably to one conclusion: that the countries of the industrial West will face a stern problem concerning their integrity because we will have to face at least the possibility of holding our own standards of living—perhaps even of accepting a drop—if we are to satisfy the demands of the emergent countries for this sort of aid. It seems that when we look at the gap between India and Britain today, even in terms of per capita income, we see that there is no basis of equity, no basis of Socialism, in a world in which such contrasts can continue to exist.

The question of the foreign debt which India carries was referred to by the right hon. Gentleman. The House should know that servicing that debt in 1965 will cost India £100 million, which is three times the 1963 figure and which is equivalent to 20 per cent. of her total export earnings this year. Looking ahead, we see that the servicing of the foreign debt is liable to rise in the next few years to as much as £400 million a year, an extraordinary burden to place on a country which is trying to lift itself up, as are all the emergent countries, by her own means.

It is worth looking at the sources of foreign capital. In 1962–63, the major sources of foreign capital coming into India were, from the United States, £436 million; from the Soviet Union, £179 million; from West Germany—and I found this most unexpected—£130 million; from the United Kingdom. which should traditionally be the main source of India's capital investment and aid, £95 million. These figures seem to indicate a very significant change in the attitude of the Indian Government to foreign private capital investment.

The industrial policy laid down by the Indian Government as long ago as 1948–49 certainly gave opportunities for the investment of foreign capital, but did so under conditions that ensured both continuing Indian control and the retraining of Indian experts to replace those from overseas. None the less, the balance-of-payments crisis, the death of Prime Minister Nehru, the growing pressure from China—which is not only felt on the Chinese-Indian border but throughout the whole of Asia—these factors, and others, are leading to a growing introduction of private capital and of capitalist influence, and a move away from the type of Socialist development that we on this side want to assist India in attaining.

The advances in education so rightly referred to by the right hon. Gentleman need to be studied in their true context, and the most important context in a country trying to industrialise itself is the literaracy rate, which is still under 25 per cent. In certain Indian States it drops much lower. Perhaps one should not say it in the presence of the hon. Lady but the literacy rate among women is significantly lower than that among men. Nevertheless, we realise, as does the right hon. Gentleman, that beneath these rather florid economic problems lies the problem of education.

India contains one-third of the total population of the emergent countries. Its energy consumption, which should always be the yardstick by which we can measure the prosperity of a country, amounts to 161 kg. of coal equivalent per year, compared with a world average of 1,465, and a figure in Japan of 1,388, and of 4,070 in Australia. These are stark figures when we are considering aid for a country such as India. The educational target for 1965–66 is that 76 per cent. of children between 6 and 11 will attend primary schools and 28·6 per cent. of those between 11 and 14. The very striking contrast is that in the 14–17 age group no fewer than 15·6 per cent. are expected to attend school in 1965–66.

I would emphasise that aid other than financial aid is needed—not that I discount the financial aid, because I have stressed its overriding importance. We must, however, also look at other means of assistance. There is the need for teachers, and for new exchange schemes between India and this country. There is the need for assistance, possibly, with crash training facilities, for teachers by sending out some of our best educantionists for short terms. There is the need for new science-based methods of teaching in the universities, training colleges and schools, and methods particularly applicable to the special problems of the Indian countryside and the Indian towns. Assistance is needed for educational research based on that sort of thing.

Repeated reference has been made to population control, and I heartily agree with what the right hon. Gentleman had to say on that subject. I was surprised to learn how low in the hierarchy in their Ministry of Health the population control officer, or whatever he is called, came. There is no doubt of the importance that India attaches to this population problem. In India's third Plan, we find it said of the family planning programme that … the objective of stabilising the growth of population over a reasonable period must be at the very centre of planned development. We are facing not the sophisticated individual problems of family planning as we have them here, but the much greater problem of population control, which is a community concern. We therefore need research into cheap and common-sense unsophisticated methods of birth control—not the mechanical methods that are not applicable to uninformed and unlettered population. We need a vast programme of community education, using some very sophisticated methods, and we need assistance in altering the attitude of the Indian peasant—shared, I think, by primitive farm communities everywhere—that the more sons a farmer has the richer he becomes. We needed to change that attitude.

I urge the Government to look at financial aid to emergent countries in a new way. I believe that we should move away from the principle of nationalisation, of community projects, which we on this side hold to be important, to the internationalisation of projects, whereby this country could provide Government funds directed to investment, to projects, to the types of scheme referred to by the right hon. Gentleman which are not necessarily capital-intensive but labour-intensive, and where we can provide the "know-how," the experts, the finance in collaboration with the Indian Government which, under Indian industrial policy, exert a very wide hold over industrial development.

I believe that the return in political terms, in support of the Indian Government by displaying our confidence in their future, would answer to a very large extent the point made by the right hon. Gentleman about the conflict between China and India. The return would be a long-term one—we could not expect profits or quick returns—but it would assist British industry because, as was said in a recent Report to the Development Commission in India, we could dovetail European development with Indian development.

I hope that the right hon. Gentleman will deal with these points in his reply. I merely want to emphasise from this side of the Chamber how much we share the concern expressed by the right hon. Gentleman, and how much a debt to humanity as a whole is contained in this endeavour.