§ Order of the Day for the Second Reading read.
§ THE SECRETARY OF STATE FOR INDIA (THE MARQUESS OF ZETLAND)My Lords, this Bill, if it becomes law, 149 will be the most recent of a series of enactments which have made provision for sterling borrowing on behalf of the Government of India. Under the existing enactments the Secretary of State-in-Council is empowered to borrow sterling up to a limit of approximately £320,000,000 on behalf of the Government of India. The outstanding sterling loan of the Government of India is approximately £276,000,000, and there is therefore an unexhausted capacity for borrowing amounting to some £44,000,000 sterling. It may be asked why in these circumstances is it necessary that Parliament should pass a law to make further provision for sterling borrowing on behalf of the Government of India. The reason is that on April 1 next the person known as the Secretary of State-in-Council will cease to exist. Under the Government of India Act, 1935, his powers of borrowing will likewise then come to an end. Since, under the Act of 1935, the Governor-General of India in-Council is not empowered to borrow any sterling before the establishment of the Federation, the result would be, if this Bill were not passed into law, that for the transitional period between the coming into operation of the new Constitution on April 1 next and the establishment of Federation, India would be debarred from the sterling market. In short, what this Bill proposes to do is to confer on the Secretary of State for India, after April 1 next, the same powers which are possessed at the present time by the Secretary of State-in-Council.
Your Lordships will see that the limit to be imposed upon those powers of borrowing is the same as the limit imposed on the Secretary of State-in-Council by the existing enactments. In other words, the Secretary of State after April 1 next will be given a power of borrowing in sterling on behalf of the Government of India up to a total sum of £320,000,000, £276,000,000 of which have already been raised, leaving him a balance of approximately £44,000,000. Perhaps I should explain that there is no present intention of raising a further sterling loan, but it is desirable that that power should vest in the Secretary of State after April 1 next, in case, before the establishment of Federation, it is found desirable that further borrowing should be undertaken. Then it is also necessary to provide for the administration of the sterling loans, 150 both those which have already been raised and any which may be raised in the future. The administration of the existing loans is provided for in a series of enactments, and the opportunity of this Bill has therefore been taken of consolidating past enactments and of adapting them, where necessary, to the changed conditions which come into operation on April 1 next. That is the sole purpose of this Bill, and I now beg to move that it be read a second time.
§ Moved, That the Bill be now read 2a.—(The Marquess of Zetland.)
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.