891.00 TA/3–352: Telegram
The Secretary of State to the Embassy in India 1
1806. For Amb. Appreciate ur info and helpful messages on Indian situation. Ur proposals have received careful attention of Pres, MSA and Dept, and in light of all relevant factors it has just been decided [Page 1638] to increase budget amount 1953 econ aid SOA from $90 million to $150 million of which $115 million wld be for India. Provided Congress appropriates funds, this practically meets ur orig recommendation for $125 million econ development program and represents real opportunity to move ahead with constructive, positive and imaginative approach during fiscal years 52 and 53.
No provision included in 1953 budget for $125 million grant aid for wheat, milo and cotton but will keep this question under constant examination. Wld be necessary make clear and compelling technical case need for this additional aid and persuasive justification additional contribution such aid wld make to US fon policy over and beyond that to be realized under presently proposed programs. For example, on basis India 5-year Plan data, using best present judgment on sources and amounts of external financing from use sterling balances, Colombo Plan contributions, IBRD, deficit will approximate $125 million annually next four years. If 5-year Plan data vitiated by adverse balance of payments developments or otherwise superseded, critical and detailed study required. Among other things will require detailed examination balance of payments position GOI and evidence that fon exchange saved by grant aid for commodities mentioned can and will be usefully used by GOI for additional capital equipment needed from abroad. There also wld be increased difficulty establishing that items such as electrical equipment, tractors, heavy earth moving equipment will be available in additional amounts indicated by such increase in program.
Continue believe it wise to refrain from further discussions publicly and with GOI size and detailed character 1953 program since Cong still must approve proposed budget.
- This telegram was drafted by Kennedy of the Office of South Asian Affairs and was signed by Secretary of State Acheson.↩