economic aid." Pursuant to the above, the illustrative FOA program for fiscal year 1955 shows the following:

These figures show an attempt to segregate the two types of aid and also show a downward trend for technical cooperation and an upward trend for development assistance, which pattern is consonant with the current emphasis placed on capital economic assistance. Over the period of approximately 6 years of aid to India, the program had included projects in all phases of agriculture; public health; community development; irrigation; power; water control; water usage; education from grade school through professional and scientific graduate work; training trainees and teachers; engineering, both basic and applied; transportation of all types; industry surveys; public administration; commodity aid; supplies and equipment, other than agricultural; and agricultural commodity aid.

III. Present Status of the United States Aid Program

Considering the period from 1950 to November 1954, through the contents of the Government of India progress report on the first 5-year plan, and information obtained from the United States Department of State and the Foreign Operations Administration, it appears that the economic situation of the country has improved distinctly, and that part of the immediate objective to correct the economic troubles caused by the war and partition have been largely realized. The GOI report shows agriculture up 18 percent since 1950-51. The industrial index, using 1946-100, was up to 140 in May 1954, which was a 33-percent increasce over 1950, the base plan year. Jute manufacturing shows little sign of improvement, and iron and steel production lags, due primarily to labor troubles. Other diversified industry shows satisfactory progress.

The economy has definitely moved forward. There is an overall stability of prices, the money supply has decreased, while the balance of payments has improved, and there is a marked monetary stability.

While there is an increase in public sector expenditures, it is also necessary to increase them in the private sector. The private sector appears to be gaining confidence with increased production of capital goods, new plan construction, and the lack of dryness of the market for investment funds.

In addition, the per capita income (GOI Progress Report, September 1954) has reached the 1953 plan target of a 5-percent increase, and this should be exceeded in 1954. This report of progress and improvement coincides with statements by State Department and FOA of very substantial improvement in general economic conditions.

Currently, the United States aid program in India is primarily based on a series of 31 operational agreements covering a wide variety of activities across the India economic structure. Below is a tabulation of these agreements, designed to show a comparison of United States commitments versus India commitments:

Indo-American Comparative Commitments

This is based on a FOA document "Indo-America Program, Basic Information," corrected to June 1954. It would appear that the costs shown do not include United States administrative costs. In addition, there is no indication of the extent to which counterpart rupees are included in the India commitments or in the United States dollar commitments.

Of the 31 projects described in the document, only 8 show a greater India commitment than United States commitment, or an equal commitment.

The total United States dollar commitment was $119,868,000. The India rupee commitment was the equivalent of $282,201,000 United States dollars at Rs. 4.76 to the dollar. By comparison of these totals, the ratio of dollars to rupees, or United States to India commitments, is approximately: United States: 1 :: India: 12. This ratio, which favors India, does not reflect the constantly reiterated statements of FOA personnel that country contributions to aid programs are greater than United States contributions, in ratios of 6 to 1 and up to 10 to 1. It should also be noted that India commitments included service costs of all types, in addition to money costs.

IV. Indian Community Development

Operational Agreement No. 8, Community Projects, showing India commitments 11 times those of United States, or $120 million greater, is a single item which makes for the favorable overall India ratio. Excluding this item shows an excess of United States commitments and, in terms of dollars, the United States commitments would be approximately $28 million greater than the Indian commitments. It would appear, from a review of this tabulation, that the projects desired by the Government of India were those showing a greater India commitment, and that the rest were either not considered desirable or necessary or at least were of a very low priority.

In addition to these agreements, there is a small number of strictly technical assistance projects, some of which supplement the agreements.

V. The Agricultural Phase of Indo-American Aid

The emphasis of the agricultural phase of the aid program has been shifted from an emergency nature to a long-range viewpoint involving conservation, marketing, credit, research and development, and extension service. This is due to the beneficial results of the commodity development, fertilizer, and irrigation projects. In connection. with this shift, former United States Ambassador Allen, in a discussion in late October 1954, indicated that there should be a reduction, but not an elimination, of agricultural aid.

VI. India Concentration on Malaria-Control Program

The health program has primarily centered around malaria control as the major need from which the greatest benefits might be derived. It has been felt that this disease was basically responsible for retarding India's development. United States aid furnished has been

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in the form of medical, professional, and technical personnel; supplies and equipment; and mobile and fixed clinical and laboratory

centers.

This program has progressed to the point of nearly complete coverage and should be tapered off. In this connection, it appears that FOA, as recently as December 1954, issued a procurement authorization for 6 million pounds of DDT at current market prices. This would amount to approximately $1,320,000, exclusive of freight and handling charges. This quantity would be approximately a 2 years' supply for an intensive program. While not technically perishable, DDT does deteriorate in storage, particularly under hot, humid conditions.

Since FOA personnel have stated that DDT is used only for health programs and not agricultural programs, and that the health program for malaria control should be phasing out, it would appear that best judgment was not used in issuing this particular procureinent authorization.

Even if the malaria-control program was not on a downward trend, it would seem unwise to have done this because this total shipment would dull the benefits of a continuing program, as well as unnecessarily exposing the DDT to deterioration and loss.

VII. Tubewells in India

It is felt necessary to comment, because of its continued controversial nature, on the tubewell project, Operational Agreement No. 6. The United States costs for the original 2,000 wells was $13,700,000, or $6,850 per well, exclusive of power or pumping equipment. An additional 650 wells will cost the United States $5,260,000, or $8,090 per well. It is normal in projects of this sort to see a downward trend in unit cost when quantities are increased. rather than an upward trend, as shown by the above figures.

The latest available figures, November 1954, show that of the 2,000 wells programed in fiscal year 1953, 1,360 have been drilled, of which 872 have been completed, but the number in operation was unavailable. Of the 650 programed in fiscal year 1953, available figures show 65 to 80 complete, and 55 in operation. It appears that, while this was a sound project, it was poorly programed and administered. The necessary power and pumping equipment for operation was not coordinated with the well project in a manner which would provide for them being available as near concurrently as possible with the completion of the wells. It is understood that the power and equipment picture is now improving.

VIII. United States Labor Program in India

The current program in the field of labor is not large. During 1951 and 1952, the United States Department of Labor recruited and sent out three technicians to the technical cooperation mission to assist in the Ministry of Labor on a program of industrial hygiene. There is presently one man, an industrial relations adviser, on the mission's staff. Under the illustrative fiscal year 1955 program, a labor group of eight was proposed and, in addition, a total of 70 labor trainees was to be brought to this country.

A program to cost $100,000 of encouraging Indian universities, among others, to establish institutes of labor and industrial relations, was included in the fiscal year 1955 program.

IX. Community Development a Major Effort

The community development program, Operational Agreement No. 8, is covered in some detail, since it appears to be the single program of greatest interest to the Government of India, on the basis of money commitments ($132,737,000).

This project originated from the approach of a Chinese to Mr. Nehru with a plan to work at the Indian village level and so develop the Indian economy from the bottom up. There are involved the elements of basic education, vocational improvement, municipal government, and general enlightenment of the individual Indian.

The Indian areas were divided into blocks for development purposes, each block containing 100 villages, with an approximate total population of 70,000 individuals per block. There are currently some 220 blocks in various stages of development.

As of April 1954, the United States aid contributed $2.3 million in equipment, including jeeps, trucks, tractors, mobile workshops, concrete mixers, agricultural implements, and other items. In addition, $1.3 million of the same type was in India ready for distribution. The rural people were trained in the use and maintenance of the equipment. The Ford Foundation assisted by equipping the schools and guaranteeing to keep them going for a 3-year period. It is the feeling of the State Department and FOA personnel contacted, that this program has done the most to demonstrate the economic possibilities under a democratic form of government.