HC Deb 15 April 1965 vol 710 cc1692-712

1.9 p.m.

Sir Edward Boyle (Birmingham, Handsworth)

As I was responsible, to some extent, for the last debate going on a little over time, I will try to make up some of that time by being briefer in discussing this subject than I had otherwise intended to be.

I raise the topic of economic aid for India because during the Christmas Recess I spent three weeks in Delhi, partly to attend a Commonwealth conference and partly on a private visit, entirely unofficial, but sponsored by the Overseas Development Institute, to the Indian Planning Commission. I should like, at the start, to say how greatly I enjoyed that visit, and how greatly I appreciated the courtesy which I was shown, in particular by the Indian Planning Commission. I had talks with 27 separate people during my stay in Delhi, beginning with the vice-chairman of the Planning Commission. I am extremely grateful for all the facilities and the help which was shown to me during my time in Delhi.

I think that any visitor must be impressed with the work of the Planning Commission, and not least with the work of the Perspective Planning Division within the Commission, which has been fairly described in the Economic Times of India as something unique in the non-communist world". To set the scene, if one looks back at the record of the first three five-year plans, since 1950 in India, one is aware both of achievements and of disappointments. There is sometimes in the British Press a tendency to concentrate too much on the disappointments, at the expense of the achievements. If one looks back over the whole period since 1950 and takes the initial index as 100, the index of industrial production is now 236, the index of agricultural production 151, national income per head has gone up 27½ per cent. Government spending on social and developmental services has gone up by nearly 2 billion dollars. The rate of net investment has risen from 5 per cent. of the national income to 14 per cent., and the rate of domestic savings has increased from 5 per cent. to 11.5 per cent. Twenty-seven million more people are employed, and the number of children attending schools has risen by nearly 44 million.

All those are undoubtedly impressive achievements. At the same time, no one can doubt the very serious problems with which India is still faced. There is, first of all, their very serious continuing food problem. Food prices rose on the average by 45 per cent. between 1961 and 1964. India's foreign debt during the same period since 1950 has risen by 2.3 billion dollars, foreign exchange is still short and industrial capacity is still seriously underutilised for want of imports, spares, components and raw materials in many sections. With respect, I think that many critics of Indian planning in this country greatly underrate two things. The first is the enormous difficulties of central planning in a democracy where there is a strong tradition of free criticism both in Press and Parliament; and, secondly, the intense difficulty caused by the continuing foreign exchange shortage, which drastically reduces the freedom of action of the Government as a whole, of industry and everyone else.

I mention this to all who think that by means of a dramatic dash to freedom India can solve all her problems. It is not as simple as that. Where a licence is given for, say, a fertiliser factory, this means that there is a reasonable expectation that the Government will import the necessary rock phosphates, but, because of the continuing shortage of foreign exchange, licensing always tends to run six months ahead of these foreign exchanges facilities. The day-to-day problem of economic management and planning is like a jigsaw in which one will never have all the pieces to hand. Let all critics remember that in a developing country with severe foreign exchange difficulties, an increase in demand does not evoke automatically increased supply. It must shoot up prices and there is no automatic means of causing production to rise because of the very severe shortages.

Besides this problem of the continuing shortage of foreign exchange, there is of course a considerable backlog, during the first three Plan periods, of about 12 million people unemployed. The income per head is still very low and I sympathise with those in India who hope that sight will never be lost of the target of a minimum income of 20 rupees per month set down by the Perspective Planning Division for 1975–76. I do not believe that that target can be fufilled quite by that year, but it is a perfectly right and realistic target to go for. One must never forget just how low down India is on the scale of income per head. Then of course there is the rise in the population of 2.8 per cent., to which I shall be referring again.

I should like to look at the general achievements in the earlier Plans. In the period of the First Plan, national income rose by 18 per cent., surpassing the target of 12 per cent. During the period of the Second Plan the national income rose by a smaller figure than the target figure, but, taking the decade 1951 to 1961 as a whole, there was a considerable increase in per capita income. The Third Plan has run into greater problems. Progress in the first two years has been very slow; it was better in the third and fourth years of the period, but still not good enough.

The growth in the national income, as against the target of 5 per cent. a year, was only 2½ per cent. in 1961–62. It was under 2½ per cent. in 1962–63, it will be a little over 4 per cent. in 1963–64 and possibly in 1964–65, will have reached 6½ per cent. But during the period of the Third Plan considered as a whole, the average annual rate of growth will be only 4 per cent., as compared with the desired 5 per cent. The main disappointment has been in agriculture. Industrial production, though falling short of the target of 11 per cent., has reached an average of 8 per cent. Investment programmes should be largely completed, except for some short-fall in the private sector.

Now one comes to consider the prospects for the Fourth Plan. I shall not attempt to describe the very elaborate procedure which has to be gone through when a new plan is due. As one might expect, the precise relationships between the Planning Commission and the Ministry of Finance, and the extent to which the Plan is a directive which is followed in detail, as opposed just to laying down broad guide lines, are complicated matters, with which I shall not attempt on this occasion to trouble the House.

But, looking at the basic targets of the Fourth Plan, one sees that they are fairly simple, namely, to increase the national income overall by 6½ per cent. a year, which means a growth rate of 5 per cent. in agriculture and 11 per cent. in industry. By the time the end of the Third Plan period has been reached, India will have achieved an average annual income per head of 72 dollars, as compared with the target of 82 dollars. The aim of the Fourth Plan is to raise real average annual incomes to about 87 dollars a head.

I shall next deal with the investment target. Here I must express myself in terms of the rather unhandy Indian currency units. The Third Plan total outlay is estimated at 11,600 crores of rupees. For the benefit of hon. Members, I might explain that 500 crores equals approximately a billion dollars. The Fourth Plan total outlay will amount to 22,500 crores of rupees, of which just under 13,000 will be public sector investment and 7,000 will be private sector investment. The gap is made up by current outlay, that is, new items of current public expenditure which are included in the overall plan total.

This means a huge increase on the Third Plan. Nearly half the public sector investment projects are State projects. This will, of course, involve a considerable increase in India's savings effort. On the declared assumptions of no rise in deficit finance and little increase in net external assistance, much is bound to depend on the Government achieving large revenue surpluses through additional taxation. Taxation will have to rise much more than the expected growth in income. No one should underrate the tremendous burden which India is prepared to put on herself in order to achieve this very large increase in the desired outlay for the Fourth Plan—with very greatly increased rates of investment and many additional items of current outlay, also.

The Fourth Plan assumes that foreign aid will be maintained at the level achieved during the Third Plan period. This is qualified by a hope that the increase in debt servicing which will arise during the period of the Fourth Plan will be somehow refinanced. In the Third Plan period, India will have received 5 billion dollars gross, or 4 billion dollars net of repayments; but for the period of the Fourth Plan five billion dollars gross, because of the increased burden of repayments, will mean only 2½ billion dollars net.

A large proportion of that 2½ billion dollars will be due to the World Bank and Consortium members. My own belief is that the donor nations ought to try to maintain the same net level of aid to India for the Fourth Plan period, particularly bearing in mind the enormous burden of effort which India is prepared to make internally during this time. I believe that, if possible, gross aid should rise during the Fourth Plan period from 5 billion to 6 billion dollars.

Exports are running at 800 crores of rupees, which is 6 per cent. of the national income, and they are forecast to rise by about 5 per cent. a year during the period of the Fourth Plan.

May I comment especially on agriculture, because we must realise the crucial importance for the Fourth Plan of the growth target of 5 per cent. for agriculture. There has been a set-back during the past three years. The weather has played the largest part, but almost everyone to whom I spoke agreed that there had also been policy shortcomings. I believe it is a great mistake to be too pessimistic about Indian agriculture in the future. There is a very considerable increase planned in the fertiliser programme. During the Third Plan the target for nitrogenous fertilisers is about 800,000 tons, and I think that India is likely actually to achieve half-a-million tons. For the Fourth Plan the target is 2 million tons of nitrogenous fertiliser and 1½ million tons of other nutrients, which is a big increase, although I know that Mr. John Lewis, to whom I had the pleasure of speaking while I was in Delhi, Clinks that, even so, this is not quite high enough.

Nevertheless, there is a very big increase in the fertiliser programme. The demand for fertilisers is extremely strong. Improved seed is being produced. There is a considerable reorganisation of the agricultural extension work. I think that there are also grounds for encouragement concerning irrigation. There is much less complacency about this than there was in the past. Hitherto, areas used to be considered irrigated once the main dams had been completed, but the recognition of the need for secondary channels and more adequate lining is much more widespread today. Then there are the intensive district programmes of the Ford Foundation. There was on one to whom I more enjoyed speaking on this whole subject of agriculture than Mr. Emsminger, of the Ford Foundation. His programme has been going on for four years, and the problems are well-documented.

Important developments are also going on in the agricultural schools, and, above al, one must pay tribute to the outstanding courage and intelligence of the present Minister of Agriculture, both over the higher incentive prices and also over food distribution. Mr. Subramaniam knows that he is dealing with a technical subject. He has seen to it that price policies are producer-oriented for the first time, though there are controls at the retail end, and considerable steps have been taken in food distribution. Obviously, there are continuing problems in this sector. For instance, one could easily criticise the administrative separation of the departmental arrangements for irrigation and for agriculture. Also one has to remember the importance of continuing to diversify industry in the rural economy of India, and to create job opportunities in rural areas which skilled and educated people will find satisfying. The brain drain from the land is a very serious matter in India. One must not judge India from her big cities. One must remember that the heart of India is the villages. This is certainly my own strong belief.

But when all is said and done, if the planned inputs of water and fertiliser now start to materialise on the scale envisaged, they could evoke a very considerable response, given the continuation of prices favourable to producers. Inputs can quite suddenly release greater and more efficient outputs when the price policies are right. I think of the British coal industry, in the second half of the 1950s, and how the change in price policy seemed suddenly to release the advantages of the high capital expenditure of earlier years. I think that exactly the same thing could happen over agriculture in India.

Before I come to the last part of my speech, I want to refer to family planning. It is quite unreal to talk about India in any context without being as frank about the population problem as everybody is in India. Why we all keep up the conspiracy of silence about that subject, I have never understood. Nobody is so foolish in India, because everybody realises that a population growth rate of 2.8 per cent. a year means that there are likely to be at least 625 million people in India in 1975, and that this is the most serious problem of all. It is worth remembering that the population of India in 1975 will be well above half the total population of the world in 1850. That is a figure which is always worth remembering. Many steps are being taken by the Government such as the decision to set up a firm to produce 160 million condoms a year, to produce very cheap inter-uterine coils, and to educate many more people to undergo the simple operation of vasectomy. But I am a little concerned that if one looks at the Minister of Health's Department one finds that the Director of Family Planning is well down the hierarchy in the Ministry. There is need for a really powerful director-general in this field.

Finally, I come to the lessons which can be drawn for all of us. Frankly, there are some criticisms which could be made. Output in India seems too low in relation to the capital employed. And while I think that it is entirely right for the Perspective Planning Division to insist on the need to maximise the creation of physical production facilities, it is equally important that attention should be paid to getting the maximum output from investment, and the optimum use of existing production capacity. And while there must, of course, be a continuing nexus of import control, it could perhaps be argued that fiscal measures and excise taxes could be used more and that officials sometimes try to decide too much in complete detail without the requisite information.

Mr. Deputy- Speaker

I am sorry to interrupt the right hon. Member, but he seems to be criticising another Government. I hope that he will come to matters for which Her Majesty's Government are responsible.

Sir E. Boyle

Indeed—and I shall now pass straight away to what is much more important—the lessons for ourselves.

In general, we need to give more thought to the whole question of the rationale of aid and what should be the balance between project and non-project, or general purpose aid. This is a highly important subject. One needs to remember that project aid entails considerable amounts of spares and components which are consequential, and non-project aid can also be of great importance in helping existing capital resources to be used more efficiently.

We also need to remember that the basic rôle of aid is to supplement the foreign exchange resources of developing countries. The problem of so many developing countries is that even if they can save enough to finance the whole of their development programme, the need for foreign exchange may still persist. The "dollar gap" sort of situation, which we knew so well in this country applies very strongly to India today, and will go on applying—I believe—for a long time. It is quite wrong to assume that in most developing countries an increase in savings will bring about a reduction in imports or a sufficient increase in exports to pay for the foreign exchange content of their investment programme. I beg everyone in Britain to try to avoid the error of supposing that the balance of payments of developing countries are basically in equilibrium. This is an error which is often made. We tend in Britain to have an exaggerated reverence for 19th-century international trade theory in circumstances in which it is just not relevant.

When imports are already strictly controlled, a rise in domestic savings is not likely to be reflected in any significant fall in demand for imported goods. There- fore, however successful India may be in expanding her savings and investment, I believe that a continuing serious foreign exchange stringency is something that she will not be able to avoid.

I apologise for having taken up so much time. I now turn, lastly to the question of British Government policy. In looking at our aid to India—and Pakistan, too—we must look at it from the point of view of priorities in public expenditure because, after all, the coming planning period, both in India and Pakistan, is going to be crucial to the whole future of the economic progress of those countries. The present level of British official aid to India and Pakistan is about £50 million a year and I think that the time is coming when we may be called upon to provide aid at a rate of something like £75 million a year to India and Pakistan combined. Can we take the attitude that we may have to not play our full part in aiding India and Pakistan in their plans because we cannot find this money from public funds? I am sure that this need should rank high when we are considering priorities for public expenditure, particularly bearing in mind the fact that what we are committing ourselves to now will not have much effect on disbursements for another two or three years. This is not something that we can decide just in terms of our short-term balance of payments problem, especially when we are considering what can be done by way of refinancing.

We should also consider whether our whole pattern of aid is rightly directed for India and Pakistan. Are we doing as much as we should in aiding agricultural development, in helping India to make the best use of her surplus manpower and slowing down the increase in population? Agriculture is in relation both to the internal development of the country and is a crucial factor in the development of India to the prospects for the growth of her exports. Her export performance must depend in part on how rapidly the production of export commodities can be increased, as well as on the extent of the rate of domestic consumption and India's taxation policy.

When we consider the employment aspect we must ask whether we are not. perhaps, devoting too much aid to the most capital-intensive sectors of the economy. Surely there are parts of the economy where the more labour-intensive techniques would seem to be indicated? Is there any way in which our aid could do more to help in that direction? Finally, in view of the crucial importance of controlling the rate of population would it not be right heavily to subsidise any product which can get accepted in the context of restraining population growth?

These are a few suggestions I have to make. I apologise again for having taken such a high proportion of the time available for the debate. I hope that the House will agree that the whole Indian sub-continent is a matter of crucial importance to us all in the West. I personally believe that the battle for prestige between India and Communist China is a battle of quite exceptional importance to us all, and one in which w have a larger stake in winning than most people in Britain realise.

That distinguished historian Sir George Clark once drew a distinction between the seventeenth century countries which were still feudal properties and what he called "the growth of pays or regions". India is one of the great historic regions of the world. One has only to go there to realise this. I am certain that the people of that country wish to maintain the best of relations with Britain. They do not in all respects want to imitate the West and they are not troubled by any sense of a "love-hate relationship" with the West. Since the whole Indian subcontinent is such a vital area, I hope that this is a topic which the House will consider worthy of an hour of our time on an occasion like this.

1.35 p.m.

Dr. David Kerr (Wandsworth, Central)

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.

1.48 p.m.

Mr. John Tilney (Liverpool, Wavertree)

I count myself even luckier than my right hon. Friend the Member for Birmingham, Handsworth (Sir E. Boyle) in that earlier this year I spent a month in India as the guest of the Indian Government, and I am extremely grateful for the hospitality I received. I went to almost every major State and saw much agriculture and industry. I agree that India's burden of debt repayment to other countries is very great, and for the need for exports. But I remember that the Integral Coach Factory, in Madras, was cock-a-hoop because it had the lowest tenders for two developing countries elsewhere, but then found that Europe offered long credit terms which India cannot afford. That is one of the problems which India faces.

I agree that because of our balance of payments difficulties our aid is nothing like enough. I do not believe that we realise how well India stands in regard to her refugee problem—70,000 Tibetans, 20,000 people from Burma, 1 million last year from East Pakistan—and it has also a population increase of 1 million new mouths to feed each month. We must endeavour to stop the population explosion. Anything that Her Majesty's Government can do to help India over birth control by the production of mobile family planning units such as are provided by the Government of Maharashtra should be done. It would help immensely, too, if the Government could, perhaps, get the United States Government to house some of their surplus food in silos in India. That might well prevent a famine in the years to come, a famine which may come through lack of monsoon or through transport difficulties.

I saw some of the agricultural fields around Amritsar where the salt had come to the surface in land which used to produce so much food. I realise. however, that emphasis is no longer on heavy industry, but that agriculture is the main culture. Many leading statesmen have said that. I was lucky enough to see one of the big fertiliser plants in the foothills of the Himalayas.

There are other ways in which we can help India, such as by the new Durgapur Scheme which, I am told, will produce £250 million worth of bottle-necked imports in about two years, but not until then. Wherever one went there was acute shortage of steel. Private industry after private industry was working under capacity, because it could not get components through shortage of steel. I hope that the Minister will say something about Kipping aid, which has been so immensely useful in the conventional exports from this country and which are good for this country and for India. That trade keeps up the links with this country until fresh oil discoveries or better times come along.

Will the hon. Gentleman look at whether, through the F.B.I., we can give more technical aid to various foremen on the shop floor? I found only 12 people from the Indian railways went abroad last year. They could not afford for more to go. Could they not be helped to go in Indian ships or by Air India? This would not affect our balance of payments. In that way we can bring here a new generation to follow the Indian Civil Service, which has helped Anglo-Indian relations so much in the past.

1.52 p.m.

The Parliamentary Secretary to the Ministry of Overseas Development (Mr. Albert E. Oram)

I shall do my best to rectify the time-table, which got rather disjointed at the beginning of this debate. I am sorry that a number of my hon. Friends and hon. Members opposite, who have a keen interest in this highly important subject, have been squeezed out of the debate.

That there has been so much interest in this subject is a tribute to the initiative of the right hon. Member for Birmingham, Handsworth (Sir E. Boyle), who raised it. I compliment him on the vast amount of information he presented to us in such a fascinating way, information which he gathered as a result of his recent visit to India. It is valuable when hon. Members have the opportunity of travelling abroad for them to come back and share their experiences and ideas with their fellow hon. Members.

This debate gives me an opportunity of re-emphasising what other hon. Members have said, the highly important position that India occupies not only in the world, but, because of that, in the British aid programme. The right hon. Member spoke of the planning mechanisms and gave much interesting information as to how successful economic planning by democratic methods has been. India is also of great importance to us in terms of aid because, as has been graphically illustrated, it as much as any other country faces the great problem of poverty and under development.

The most useful thing I can do in view of the shortage of time is to concentrate on British aid rather than the internal situation in India and to preface my brief description of what we are doing by a reference to the fact that my right hon. Friend the Minister indicated at the outset of her taking office how important she regards both India and Pakistan in this matter of British aid overseas. As the House will know, she went to these two countries just after Christmas. She saw a great number of people involved in the economic development of India and was able to make important contacts.

My right hon. Friend, like the right hon. Member, had a session with the Economic Planning Commission and she was able to let her Indian opposite numbers know what plans we in the Ministry have for overseas development. She assured them, for instance, that we are setting up an economic planning staff within the Ministry and that we are doing so to enable us to keep in closer touch with the development plans of countries such as India and to fit our aid into those plans so as to make it as effective as possible.

The right hon. Member raised the important question of what the pattern of aid should be. He asked some important questions in that connection. I assure him that our economic planning staff is examining just that series of questions and I am grateful that he drew attention to them.

The right hon. Member's main point, which was emphasised by my hon. Friend the Member for Wandsworth, Central (Dr. David Kerr), was that India, for its Fourth Plan, should receive the same net amount of development aid as it has been receiving under the previous plan and that in considering this we should take into account the fact that the problem of servicing debt is becoming an increasing burden for India. I assure the right hon. Member that when the Government considers the Fourth Plan—we shall consider it with the Indian Government and other members of the consortium—and when we reach decisions on the appropriate level of aid, we shall take full account of the points he made about India's continuing need for foreign exchange both for development and for servicing the increasing debt burden. The Government would consider India's request and be as sympathetic as possible in the light of our own economic circumstances at the time when we consider the plan.

I will say a few words about our programme of aid to India as it is at the moment. It consists of two parts, capital aid in the form of loans for economic development and technical assistance. My hon. Friend concluded by urging us, as did the hon. Member for Liverpool, Wavertree (Mr. Tilney), to make sure that the fullest possible technical assistance shall be made available to India. I hope to say something about what we are doing in that connection. First, about capital aid. We are members of the Aid to India Consortium and at the moment we are between two meetings which are deciding the amount of the pledges that the member countries will make in connection with the next year's programme. We have endeavoured to use our influence in the Consortium to encourage members to provide aid on soft interest and repayment terms in a form most valuable to India.

The right hon. Member said that general purpose aid is of great importance, and I entirely agree. Half of our capital aid is in general purpose form and we have a very good record by comparison with our partners in this matter, as I am sure he recognises.

The hon. Member for Wavertree asked me to say something about Kipping aid. I entirely agree with the hon. Gentleman that this is a most useful component of our aid programme. It is that part of our aid which enables India to import components for maintenance purposes, and so on, and this links with our export effort. I agree entirely that the importance of this should be stressed.

The House will wish to know the total amount of our aid. Since 1958, this has amounted to £235.5 million out of a total consortium aid of £1,956 million. Over the past two years our aid has reached the level of £30 million. We have made important contributions to two major projects—the Bhopal heavy electrical plant and the Durgapur steel works. Subject to conditions which have to be agreed, we have offered to commit part of our future pledges to a large extension of the Durgapur steel works.

Mr. John Harvey (Walthamstow, East)

Will the hon. Gentleman concede that the figures he has given, impressive as they are, are very much further enhanced if private investment in India—and, indeed, in other parts of the developing world—is taken into consideration? Would the hon. Gentleman, even at this late stage, urge upon the Chancellor of the Exchequer the need to try to differentiate between foreign investment of this type and foreign investment of the portfolio type, if the Budget is not to do unnecessary and undesirable damage to the aid we are giving to other countries?

Mr. Oram

We have spent five days debating the Budget. Since we are already running over time on this debate, it is a little optimistic of the hon. Gentleman to try to entice me in that way. I agree with the importance of the point that he raises.

I want to say a few words about technical assistance, on which, since 1950, we have spent nearly £4 million. It is not the money so much as the skills that we are able to transfer which are important. In connection with the Indian Institute of Technology in Delhi and also as partners in the Commonwealth Educational Co-operation Scheme, we can claim to have been playing an important part in this transfer of skills. We have enabled technicians in the realm of machine tool production, mining research, textile research, building and fire research, oil and natural gas production, and in other spheres, to take their place as advisers in the Indian economy.

I am glad that hon. Members mentioned the highly important subject of agriculture. It is one of the cruxes of the matter in terms of Indian development. This week, at Question Time, my right hon. Friend said that she is fully aware of the importance of agriculture and indicated her complete willingness to help India in any way that we can in this connection.

Another important point on which I should say something is family planning, because I entirely agree with what the right hon. Member for Handsworth said about the crucial importance of this question and the need for us to be quite open and frank in discussing it. The population explosion in relation to India is of paramount importance in considering which road that country is to travel.

Hon. Members may remember that at the Colombo Plan Council meeting, held in London before Christmas, my right hon. Friend, who was in the chair, raised this question of the population explosion and the need for family planning. Largely because of her initiative, it has been decided that this shall be a subject for special discussion at the next meeting of the Colombo Plan members in Karachi. Similarly, at the E.C.A.F.E. meeting, held in Wellington recently, both the British delegation, which I led, and the United States delegation, made offers of help in family planning. This is what is needed in connection with Indian development.

We as a country are making an important contribution—India recognises this—within the limits of our resources to development in India. We shall continue to make our maximum contribution. Our regret when we think of the vast subcontinent of India and its conditions can only be that whatever we do must, by comparison with its vast needs, always seem rather miserably small. This should be encouragement to us to do the maximum, and this we intend to do.

Mr. John Harvey

On a point of order. Mr. Deputy-Speaker, may I ask you to represent to Mr. Speaker that there were obviously a number of hon. Members on both sides of the House who had hoped to be able to contribute something of value to this debate? It might be widely appreciated, therefore, if a similar opportunity could be given to the House in the future.

Mr. Deputy-Speaker

I appreciate the hon. Gentleman's difficulty, but what he has raised is not exactly a point of order. The Adjournment debates for today are fixed, by mutual understanding, to last for about an hour each. If one debate turns out to be as important as this one has done, some hon. Members must be disappointed at not being called. Representations on the need for further debate might be made through the usual channels rather than as a point of order.

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