Other MSP dollar programs (nonagricultural) provide for the following: The local currency generated from the sale of both agricultural and nonagricultural products under Public Law 665, in the amount of $46 million, will be used for loans and grants for economic development. XV. Multilateral Aid This type of aid is provided to India from two sources: The United Nations and Colombo plan. The United Nations aid touches the same areas as United States aid to India but in smaller amounts. Available information indicates that there is little if any duplication but some minor overlapping. The overlapping seems to occur when the two aid sources contribute to the same projects, one supplementing the other. There does not appear to be any major difficulty in this respect. U. N. aid to India from fiscal year 1949 to fiscal year 1954 totaled $12,390,000 and in fiscal year 1955 is scheduled in the amount of $650,000. The Colombo plan involves Burma, Ceylon, India, Indonesia, Japan, Pakistan, the Philippines, Canada, Australia, New Zealand, United Kingdom and the United States. This group of countries furnishes aid in terms of technical assistance, equipment and commodities upon request of an Asia member country. There is no formal organization or overhead administration to handle the requests. The Executive Secretary in Ceylon merely forwards the request to a member country which in turn furnishes the required aid and maintains no control over its application. It mostly takes the form of furnishing technical services with the providing country paying the costs and the recipient country exercising complete control from the time of arrival of persons or equipment in the country. The Colombo plan report, October 1954, released after the plan conference in Ottawa, Canada, reiterates the facts of forward progress previously noted in the paper during the discussion of India's first 5-year plan. Aid to India through the Colombo plan is recapped as follows: Canada, Australia, and New Zealand provided, during the period fiscal year 1949 to fiscal year 1954, $66.2 million and in fiscal year 1955 estimates show $17 million. The United Kingdom has furnished no aid as such but has released blocked sterling during the period fiscal year 1949 to fiscal year 1954 in the amount of $294 million and in fiscal year 1955, $98 million. The United States contribution is considered to be its total aid given under its bilateral agreements with India and none is channeled through the Colombo plan. This has totaled fiscal year 1949 to fiscal year 1955, $501,670,000 not including United States contributions through the U. N. or United States Voluntary Relief Agencies. IBRD loans are also excluded. Some of the member countries, notably Ceylon, are currently not eligible for aid due to noncompliance with the Battle Act. XVI. Discussion The need for aid to India and its future continuance must be based on United States policy requirements, dictated by current situations, the progress of India's economic improvement and by United States humanitarian desires. From material available and discussions with personnel of the Department of State, FOA, and other interested United States Government agencies, the consensus of present thinking is that aid is currently needed and will be needed for at least the next five years on an increasing scale of 10-20 percent. This is based on the factors that India has not reached a satisfactory point of economic stability; and that pure humanitarian interests continue. However, it has been stated on several occasions by Mr. George Allen, former Ambassador to India, John Ferris, India Desk, FOA, and others that if United States aid were withdrawn, India would continue its own development program and would undoumtedly resist Communist pressure and remain free and democratic. The emphasis on future aid tends to be in the field of industrial development and includes power and transportation phases in concert with industrial development. The types of aid to be given are economic aid of all types including technical assistance in the areas of industry, public utilities and services, health, education, and agriculture. The form of aid contemplated has been a matter of much thought. The question of whether it should be in terms of dollar or local currency grants, loans or commodity grants or loans has drawn a variety of answers from discussion and in congressional hearings. There appears to be agreement that a total loan aid program would not be resisted by the Government of India. The phasing out of aid to India poses a difficult problem. It appears impossible to fix a date for the cessation of aid. However, there are strongly divergent views regarding the type and amount of continuing aid. XVII. Findings 1. United States aid to India has accomplished specific results and marked increased economic stability. 2. The need for agriculural aid has decreased. 3. The need for public health aid has decreased. 4. India would continue to develop without United States aid but more slowly. 5. If aid continues, it could be on a bankable or near bankable loan basis. 6. There have been in the past failures to properly coordinate projects within the same programs but this situation has improved. 7. There is no physical integration of the USOM and the United States Embassy. 8. The USOM could be integrated with the Embassy, with savings in cost and efficiency. 9. Care should be exercised to avoid United States participation commitments on a second India 5-year plan prior to determining the target for aid cessation. 10. Generally speaking, the only method of phasing out aid to India is by control through decreased appropriations. It must be borne in mind that this study and evaluation was made without the benefit of all the facts or a field examination, neither of which was possible, and is necessarily limited by these factors. |