Monday 15th March, 1954
PARLIAMENTARY DEBATES
HOUSE OF THE PEOPLE
OFFICIAL JREPORT
VOLUME I91954 Sixth Session 1954 PARLIAMENT SECRETARIAT NEW DELHI :^ 9L8D : . . A fv.. , , :v-j. (■■>,. .... i \ w.-'C-v/k i y • Acc. F>o...A-5T.a.jft;>rr._ _ ™ K Ds^ 4 .... PARLIAMENTARY DEBATES (Part I—Questions and Answers) OFFICIAL REPORT 1047 1048 HOUSE OF THE PEOPLE earth chloride and rare earth car bonate in the Q u a n t it y I have men Monday, 15th March, 1954 tioned, viz. approximately 1,000 tons. We are also getting trisodium phos phate as a byproduct, and t r is o d iu m The House met at Two of the Clock. phosphate is used for preservation of [Mr, Speaker in the Choir] boilers and fillers in soaps. With re gard to profits and losses of the fac MEMBER SWORN t o r y , I am not able to give the infor Shri Bimalaprosad Chaliha (Sibsa- mation, as i t is not in p u b l i c interest. gar-North Lakhimpur) Shri Bahadur SingCi: What is the amount of foreign exchange that we ORAL ANSWERS TO QUESTIONS get b y exporting monazite to foreign countries? M o n a z i t e Mr. Speaker: That would also not *997. Shri Bahadur Singh: WiU the be in the public interest to disclose? Minister of Natural Resources and Scientific Research be pleased to state: Recruitment to A ll-I ndia Sfkvices (a) the quantity of monazite treat- *^998. Sardar Hukam Singh: (a) Will >ed at Alwaye during 1953-54; the Minister of Home Affairs be pleas ed to state whether any over-age re (b) the amount of rare earth chlori cruitment under the Emergency Re des and carbonates produced from it; cruitment Scheme for Part A States and and under the I.A.S./I.P.S. Scheme (c) whether this output was ex for Part B States was made during ported in toto or any part of it was 1953-54? used in local industries? (b) If so, how many were recruited The Deputy Minister of Natural Re> and in what States? sources and Scientific Research (Shri The Deputy Minister of Home K. D. Malaviya): (a) and (b). A.bout Affairs (Shri Datar): (a) Yes. 1.000 tons. (lb) A Statement is laid on the (() It is not in the public interest Table of the House. [5ee Appendix to give this information. IV, annexure No. 7] Shri Bahadur Singh: What is the Sardar Hukam Singh: May I know financial position of the industry that whether this scheme is to continue, or produces monazite? Is it running at now that the emergency is over, whe ^ loss or at a profit? ther it is to be discontinued? Shri K. D. Malaviya: This monazite Shri Datar: The emergency recruit processing factory is producing rare ment is over now. 768 P.S.D. 1049 Oral Answers 15 MARCH 1954 Oral Anawen X050 Sardar Hukam Sinrh: Was the recruitment made in the open market or were these persons taken from any % (n ) T>nn' aifT w t ^ other source? ^ ftr m v Shri Datar: Recruitment was made IT ^ »nn t ftr in the open market by interviewing PW «I»V candidates. ^ 3tT ^ ? Sardar Htikam Sinrh: In future recruitment, is there any percentage fixed for promotion from the State 1 ftltfIT ^ fi'TT fti TO : Wr ^ 5TPT t f r ?T^«rT5T # ^ 3ft ^ ^ VTW VX ^ ^ f, «FT fip^Tr 3TT t ? arnftn ffm t afir XTTrfl' ^ ? i. *r) ^nr % 'nrfiT fr^ 5Ts? »* H u * ' ») . ^ lx<-, ^ f ? The Parliamentary Secretary to the [Mauiana Azad: Yes, this matter has Minister of Education (Dr. M. M. Das): also been placed before the Board and (a) Ten, if the Board likes, it can consider it.] (b) Eight. Out of ten Research As ^ : A' sistants, eiRht are familiar with the Sanskrit language. (c) Yes, in a large measure, 5^ 3pT ^ ^ % 5rr^ OI5I Oral Answers 15 MARCH 1954 Oral Answers 1052 ^ ^TFni JHfTR arrrr, 1« ))l j»<^ ^ »5 v J ^ i 5 ,^ »j ^ U*i^ ^ *4 ■ *>!}t 2 o y > 2 -a - ^ ^ ))* ‘-^j^ ^1 1 ^ l*J ^ W - lx<«. \j^ Al< »5fj)<> ^>*1^ u>*- - ^ S »» r*^ ^ >t* H lt^ ^sh- h rt ^ »iJie5 li,* u -. \MU yS (terms) >-p ySI ^ »,-^ c:,i< [Matilana Azad: That is right, but it J ^ L , ^ i_iU is a delicate and important matter and we cannot treat it as closed. The < ^ y u>^>^ )3> Board can consider this also if it so likes.] -IK* [Manlana Azad; I cannot at this time say what expenditure has been in curred. It is, however, a fact that this kind of work is going on in the States Mr. Speaker: The hon. Member is also. When the Cabinet decided that entering into arguments a.bout the a Central body bo set up, at that question. * time it was also decided that other Central ministries and the State Gov ernments be asked to stop this work W5 »frt^ ^ ^ and to send on to this Board what r??n- >!niaT f % q? ^ 5i^fw apft ever th e y had already done. The Central ministries did so, but in some States this work is still continuing WIT ^ f 3flr WT «im and I do not think it is so objection able. Let them also coin terms. Their ?rfr 5T^ I f% Jmrn: ^ terms will also appear before the fViTT fVm JTRff ^ T 7 ^ ^ people and give them an opportunity for comparative study.] f rft TO ^ % u,*tri Dr. Ram Subhae: Singh: May I knowr Dr. M. M. Das: We have received Sir, on what basis licence to deal in books from America only. In those foreign exchange is granted and how books the prices are not mentioned. many such licences have so far been granted to other banks in India? Shri A. C. Guha: I have not got that figure with me. Some time ago I gave that information in the House. There are quite a number of banks dealing in foreign exchange in India. Dr. M. M. Das: Sir. we have receiv ed 1,011 publications. The total price Shri H. G. Vaishnav: What of those publications will ,be Rs. 1.060 were the reasons stated by the Bank only. for that licence? I,A.S. Examination Shri A. €. Gnha: There was some •1003. Shri Dhusiya: Will the Min foreign exchange work that was being ister of Home Affairs be pleased to done by other Banks. Being an agent state: of the Reserve Bank it wanted pcrmifl- sion. So. we allowed it foreign ex- (a) the number of candidates from chpnge facilitiec. the 8 cb#duled Castes and Scheduled 1057 Oral Answers 15 MARCH 1 Oral Answers 1058 Tribes who applied for the I.A.S, liURMAH-SHBLL TroPHY TO N.CC. Examination in 1953 and how many •1004. Shri D. C. Sharma: Will the of them appeared in the examination; Minister of Defence be pleased to and sta te : (b) the number of such candidates (a) whether it is a fact that Messrs. who were declared successful? Burmah-Shell Oil Storage and Distri The Deputy Minister of Home bution Company, Ltd. have presented Affairs (Shrl Datar): (a) 57 Scheduled a trophy to the Air Wing of the castes candidates applied for admission N.C.C. for competition among the of whom 27 appeared. various squadrons annually; and ’ 7 Scheduled Tribes candidates ap (b) if ^o, whether any conditions plied for admission of whom 3 appear have been attached to it? ed. Hie Deputy Minister of Defence (b) No Scheduled Castes or Schedul (Shri Satish Chandra): (a) Yes, Sir. ed Tribes candidate has qualified. (.b) It is a running trophy and is Shri Dhusiya: May I know, Sir, how ■competed for annually by all the many of those candidates passed in the Senior Division Air Squadrons of the writtea examination, but taUed in the National Cadet Corps. It is awarded viva voce, and vice versa? to the Squadron showing the best all round efficiency. No other conditions Shri Datar; We have not yet receiv have been attached to it. ed this particular detail from the U.P.S.C. Shri D. C. SCiarma: May I know if this competition is open also to the IpTo ^ ^ 5 cadets of the public schools? ^ Shri Satish Chandra: There is no Senior Division in the public schools. ^ TTf? 5TT JTRTT i JTT This trophy is only for the Air Squad •T^, aPlT ^ ^ ^ rons of the Senior Division of the N.C.C. ^ t ? ' Shri D. C. Sharma: May I know the value of the prize, the price of this Shri Datar: There is no Member be trophy? longing to the Scheduled Castes on the Shri Satish (Xiandra: We have a U.P.S.C., but the Members of the silver shield and we have got it in U.P.S.C. are taking particular interest sured for Rs. 1,000. X do not know to see that the rights of the Scheduled the actual price of the shield. Caste candidates are safeguarded, as far as possible. C e n t r a l S a l t R e se a r c h S t a t io n ♦1005. Shri Gidwani: (a) WiU the M i n i s t e r of Natural Resources and Scientific Research b e pleased to stale % sTPPft m t 3TT ^ ? what will b e the annual expenditure on the Central Salt Research Station Shri Datar: During the last three at Bhavnager? years some persons have been taken (b) In what respectg will the re in the I.A.S., some in the I.P.S, and search work done there be different some also in the Central Secretariat from the work done at Mithapur? Service, Class I. The Deputy Minister of Natural Re Shrl Dhusiya: What is the exact sources and Scientific Research (Sbri number? K. D. Malaviya): (a) The recurring Shri Datar: The number is not very expenditure for 1953-54 is expected Ic large. be Rs. 2,64,000. 4059 Oial Answers 15 MARCH 1954 Oral Answers io6o (b) The Central Salt Research Sta Shri Datar: So far as the United tion at Bha van agar has been set up Nations abservers are concerned, to conduct fundamental and applied they are treated as members of the research and not for profit. The re United Nations staff; otherwise they sults will be freely available to in- have their own nationality. •dustry. The institution at Mithapur is a commercial organisation, run for , Shrimati Renu Chakravartty: Are profit, and any new methods develop they registered under the Foreigners ed there will naturally be utilised by Registration Act; or are they immune; ihe commercial concern in its own in and if they are registered, under what terest. nationality are they registered? Shri Gidwani: Is it a private concern Shri Datar: Whenever they are ’Or a Government concern? registered, they are registered under the nationality of their own country, Shri K. D. Malaviya: It is not a Gov- that is, the particular nation to which F o r e ig n e r s i n I n d ia the United Nations* purposes, by way of courtesy, the registration has been *1006. Shri Krishnacharya Joshl: dispensed with. "Will the Minister of Home Affairs be pleased to state : D is p l a c e d P e r s o n s f r o m K a s h m ir (a) the total number of registered foreigners who were reported to be *1007. Th. Lakshman Singh Charak: residing in India in 1953; and Will the Minister of States be pleased to state : (b) how many new foreigners were registered in the same year? (a) whether the Kashmiris who left the Kashmir State, immediately after The Deputy Minister of Home the October 1947 raid in Kashmir, Affairs (Shri Datar): (a) The number have been considered as displaced of registered foreigners in India as on persons; -the 1st January, 1953, was 82,381. (b) if not, under what category (b) The information is being col they are treated; lected and will be laid on the Table of the House. (c) whether those migrants have been given concessions in regard to Shri Krishnacharya Joshi: How service, education, purchase of land many persons have come from etc.. in India (outside the Jammu and America; how many from Russia? Kashmir State); and (d) whether Government have re Shri Datar: From America, during ceived any representation from them the last year 6.251 persons came. in this regard? ^ SGiri Krishnacharya Joshi: What is the main occupation of these persons The Deputy Minister of Home in India? AITahrs (Shri Datar): (a) and (b). These persons werte displaced from the Jammu and Kashmir State and Shri Datar: They come for various their rehabilitation etc. is the responsi purposes: either as teachers, as evange bility of the State Government. It lists, or as doctors.... has therefore been the policy of the Sbri Syed Ahmed: Or as spies. Government of India not to include Kashmiri displaced persons in their Shrlmati Renn Chakravartty: What normal rehabilitation schemes but to ^8 the nationality under which the consider them eligible for relief and United Nations observers are register rehabilitation only on an ad hoc ed? basis. iOOJ Oral Answers 15 MARCH 1954 Oral Answers 1062 (c) No concessions have been allow were sent back by the Government ed except in the foliowina cases:— of India, out of those that came in 1947? (1) The Kashmiri displaced per sons who arrived in Delhi .be Shri Datar: That is not available fore the 1st July 1949 have with me. been allowed certain rehabili tation concessions in respect ' Shri Gidwani: Are Government of education facilities, allot aware that some of those persons who ment of accommodation etc. had been sent to the Bombay State, for instance in Ahmedabad, have not (2) A certain number of Kashmiri been able to live conveniently on displaced persons who were account of the climatic conditions, and formerly in the Yol Camp some of them have left and some are have been rehabilitated in the in a bad plight? If so, will Govern States other than Jammu and ment consider the question of shifting Kashmir owing to paucity of them? land etc. in that State. All these persons have been given Shri Datar: Government are not rash doles and rehabilitation aware of this particular alleged in loans etc. convenience, but Government are doing all that is possible for reha (3) It has been recently decided bilitating these people also. to extend to Kashmiri displac ed persons the concessions re garding the relaxation of age limit in Central Government Offices allowed to displaced persons from Pakistan. fTOT if irxfHv (d) Representations have been re IT? «(dM ^ fV : ceived from some of the persons from time to time but for the reasons stat ed in answer to parts (a) and (b) of this quevStion no action has been taken. 5m w fTPf a m aJTT f^^qr t ; Th. Lakshman Singh Charak: May 1 know the total number of persons (^) irfe fr, jfmr qr who left the Jammu and Kashmir State in October 1947 and came to India? (>t) wr # JTs; Shri Datar: The number was about two hundred so far as one part was concerned, but the number of those who were ultimately placed in the two camps was large; it was 75,000. (ip) aftr f’T'ITW ?TTT Th. Lakshman Singh Charak: May ^.TiT i ’fr S I 1 know the number of such persons who registered themselves in differ (5T) ^ JPT ent exchanges In India? 5tt wffr Shri Datar: Sir» I have not got that number. % W F T T ^ ®TTf*TW f w r Th. Lakshman Singh Ocmnk: May 1 know the number oi ptrsons who g I Io63 Answers 15 MARCH 1954 Oral Answers r o ^ (»r) ift'flf Tt o (c) if the answer to part (b) above bn in the affirmative, the reasoxu 5R? ^ ^ ?pr ^ I T T %HT ^PT 5^ therefor? # *rH ^ T?r f siH ? i ? r ^ The Deputy Minister of Finance T # f I (Shri A. C. Guha): (a) Yes, Sir. (b) The Government appeared In TtlJTm n th e proceeding before the Appellate ^ % TR ^ ^ t ’ Tribunal in exercise of its right under Section 13 of the Industrial Disputes Vo »fo m rnrhr; anft jt?[ ^ (Appellate Tribunal) Act, 1950, (c) The Government did so in the cfk % 5f^ spfr 5IT q w interest of the development of Bank ^ 'SfPT^ ^ w ^ *TH ing in rural areas. The application- of Government submitted that bank % ^fir ^ ^ f^5ff ^ I ing in rural and semi-ur.ban areas, having a population of and below Shri Amjad Ali; Arising out of the 30,000 should be excluded from the answer to part (a) of the question, scope of the award for a period of may I know what mode of survey is two years in case of existing branch intended—seismic, gravimetric or es and offlces and for a period of 4 aeronautical? years in cases of new ones. Shrl K. D. Malaviya; No; mostly Shri M. S. Gurupadaswamy: May I terrestrial or ffround survey has been know whether any decision has been undertaken. made already on this appeal and jiidg- Shri Amjad Ali: Only terrestrial? ment pronounced? Shri K. D. Malaviya: Yes. Shri A. C. Guha: The Tribunal held^ that the Government can onjy appear on behalf of the one bank which has ^ ^ filed an appeal. The Government felt it was no use fighting the issue 5ft5r^TT ^ ^ ’ only on behalf of one bank. The Tribunal has dismissed the appeal. «ft ¥>o ^ Shri M. S. Gurupadaswamy: If the ^TT m m t I ^ judgment has been pronounced in this case, may I know whether the Gov t 3fk ernment still think that they should ^ ^T%5T ?flrfT 5 press this demand on behalf of ban»cs which are started in rural and s:mi- % sftxiPT ^»TT^r ^rr^T ?r i urban areas? 3TWT4?r : 3nfT, 3ni^ i Mr. Speaker: I am afraid the ques tion is premature at this stage. ?Tarr^ €\ ^ f m \ Shri M. S. Gurupadaswamy: 1 am Shastri Award just asking whether the Government is appearing on behalf of all the *1009. Shri M. S. Gurupadaswamy: banks hereafter? Will the Minister of Finance be pleas ed to state : Mr. Speaker: He has clearly stated' that the Tribunal did not allow it. (a) whether an appeal against the Shastri Award is pending before the Shri Bansal: May 1 know, whether Labour Appellate Tribunal; in view of the decision of the Labour (b) whether Government have ap Appellate Tribunal. Government plied naming itself as a party to the considering any amendment of the di«p«t«; and Aelf 1065 Oral Answers 15 MARCH 1954 Oral Answers 1066 Shri A. C. Gttha: The decision of Shri N. B. Chowhury: May I know the Tribunal has come only I think whether any amount has been grant a week ago. So, it is too premature ed under the Nationa) Extension to say anything. Anyhow* when the Scheme? If so, what amount? Government appeared before the Dr. M. M. Das: National extension Tribunal as an appellant, I think the ol what? Agriculture? Members may take it that the Gov ernment are serious in the matter. Shri N. B. Chowdhury: Appoint ment of teachers in West Bengal. G r a n t s t o W e s t B e n g a l MOIO. Shri N. B. Chowdliury: Will Mr. Speaker: Order, order. the Minister of Education be pleased to state ; Shrimati Renu Chakravartty: May I know if during the last one year, (a'l the amounts of grants made by any appeal has come from the State Government to West Bengal during Government of West Bengal to the the year 1953-54 towards the cost of Union Government for monetary aid higher education in the State; and in order to help them to pay increas ed salaries to the teachers? (b) whether the State Government have approached the Union Govern The Minister of Education and ment for any monetary help to meet Natural Resources and Scientific its educational expenditure ? Research (Maulana Azad): No. The Parliamentary Secretary to the Minister of Education (Dr. M.- M. M h o w C a n t o n m e n t Das); (a) If the question refers to *1011. Shri N. L. Joshi: Will the grants made to Government of West Minister of Defence be pleased to Bengal, the reply is that Rs. 12,000/ state what are the arrangements pro was oaid for Post-graduate Basic vided by Government for medical re Training College in the Baniour area lief to people in the Cantonment area under the Ministry’s Five Year Plan at Mhow? of Educational Development. (b) It is not possible to reply as The Deputy Minister of Defence the Hon’ble member has not specified (Sardar Majithia): Medical facilities the period to which the question for the civil inhabitants of the Can refers. tonment area in Mhow are provide:! by the local Cantonment Board which Shri N. B. Chowdhury: May I know maintains a General Hospital. This whether the Government lays down Hospital provides treatment for in any condition before any such grant door and out-door patients, an has been called for. In any case, we H i n d u s t a n A i r c r a f t L t ). are doing the best that we can do ^nder the circumstances. ♦1013. Shri V. P. Nayar: WiU the Minister of Defence be pleased to Shri B. K. Chaudhuri: May I know state : whether it is the practice or policy of the Government to maintain any (a) the value of articles classified kind of charitable dispensary in the as disposals in the Hindustan Air Cantonment area for the benefit of Craft Ltd.. as on 1st January, 1954: the civilian population living in that and ar«a? (b) what, if any, are Ihe rules re garding the sale of such disposals? S^irdar Majithia: If somebody is The Minister of Defence Organisa inriiiK'd to be charitable, we will tion (Shri Tyagi): (a) Rs. 1,32,473/-. <;ertain]y accept it with the greatest V pleasuie. . (b) I lay on the Table of the House, Shri R. K. Chaudhuri: Do Govern a copy of the rules framed by Hindu- ment maintain... .staii Aircraft Limited relating to dis posal sales. [See Appendix IV, an- Mr. Speaker: Order, order. I am nexure No. S.I ^ .going to the next question. Shri V. P. Nayar: Is it not a fact I n d u s t r i a l M i n e r a l L a b o r a t o r y that the articles once sold from the *^1012. Shri K. 0. Sodhia: (a) Will HAL as disposals are again bought the Minister of Natural Resources and for use by the HAL at fantastic Scientific Research be pleased to state rates? -whether an Industrial Mineral Labo Shri Tyagi: The suggestion seems ratory has been set up? to be quite queer. I do not think that (b) If so, where and what is the any article which is declared surplus total staff working in it? will be purchased. (c) What is its present programme Shri V. P. Nayar: May I know whe of work? ther it is not a fact that neither the Prime Minister nor even the Minister (d) What is the nature of help it of Defence Organisation were taken is likely to render to the industries? to the disposals dump when they The Deputy Minister of Natural visited HAL recently? Resources and Scientific Research Shri Tyagi: I cannot vouchsafe for Crovernment taken to bring about this I n d i a n N a ^.m D c c k v a f d F m p l o v e e s * chanfje? U n i o n , B o m b a y *1018. Shri H. N. Mukerjee; Will Dr. M. M. Das: These public schools the Minister of Defence be pleased to are trying to model themselves after state: Che public schools in England. So, it is thougt by Government that unless (a) whether recognition has been full autonomy regarding administra refused to the Indian Naval Dockyard tion is given to these bodies, that goal Employees’ Union, Bombay; and <^ennot be achieved. (b) if so, the reasons therefor? Shri Velayudhan: May I know whe ther any general concession is given The Deputy Minister of Defence to the ^ ’heduled Caste and Scheduled (Shri Satisb Chandra): (a) and (b). Tribe candidates in the schools, and The Union has been informed that whether any of them are admitted in its request for recognition cannot be schools? considered so long as it has on its executive either dismissed employees *)r. M. M. Das: Yes, Sir. During or outsiders. the current year Government arrang ed for giving scholarships to poor stu Shri H. N. Mukerjee: Is it a fact dents of merit. The total amount that Government have singled out •was about Rs. 1 lakh, but actually on and dismissed employees who were the number of students who have prominently engaged in trade union been selected for these scholarships, work, and thereby intimidated other the total expenditure will be Rs. employees from joining the union 70.000. • concerned? Shrimati Renu Cbakravartty: May Shri Satish Chandra: There has I know if the Government of India been no case of victimisation. If any specific case is brought before Gov accepts the policy that we should have public schools on the pattern ernment, it will certainly be looked of the public schools in England and into. whether the Government of India is Shri H. N. Mukerjee: May I know going to increase the number of such why. when there is provision in our public schools? Trade Union Act regarding the in Dr. M. M. Das: These public schools clusion in the committees of trade are very expensive. To these two unions a certain percentage of out schools Government have to give a siders, Government denies recogni lump sum aid. but there are other tion to the union on that score? public schools which are managed by private bodies. Shri Satiah Chandra: The Trade Unioij Act is meant for the registra Mr. Speaker: We will go to the next tion of the trade unions. They get ^question. duly registered under the Trade Union Act, but recognition by the Governr Sfarimati Renu Chakravartty; This men I is an entirely different thiog. is no answer to my question. I want It is not considered expedient that to know if it is the policy of the the dismissed employees and outsiders «Government. should be on the executives of the Mr. Speaker: The hon. Member unions in defence installations. In this particular case, about which the Tnay not be satisfied with the answer hon. Member has put the question, €»ven. It does not necessarily follow the president, the secretary, and the that there is no answer to the ques tion. treasurer were all dismissed employees or outsiders. Shrimati Renu Chakravartty: It is Shrimati Renn Chakravariij: Are a dangerous answer. any rules framed by the Government Oral Answers 107+ 1073 Oral Answers 15 MARCH 1954 •f India specifying that in the case to the lack of the fuU quota of mem of one union In a particular Depart bers ot the U.P.S.C.? ment the only' stumbling block to Shri Datar: No. that is nol the giving recognition will be the question reason. of having outsiders on it? Shri R. K. Chaudhuri: Is it a fact Shri Satish Chandra: There are that no intimation is given to a can practical difficulties. It has recently been didate who is not called for Inter decided, and the All-India Defence Em view, or who is not appointed? ployees* Federation has been intimat ed thal this will be our policy in Shri Datar. My information is that future. intimation i3 given to all those per U.P.S.C. sons, mciuding those whose applica tions have been finally rejected. <^1019. Shri P. N. Rajabfaoj: (a) WiU the Minister of Home Affairs be plea Shri R. K. Chaudhuri: My question: sed to state whether it is a fact that has not been answered. it takes, ^metimes, nearly fourteen to fifteen months for an applicant to Mr. Speaker: That is always the> be informed by the U.P.S.C. about complaint. Next question. the fate of his application? M e r g e r o f B i l a s p u r (b) Who is responsible for this in ordinate delay? ♦1020. Shri Anandchand: Will the Minister of States be pleased to state The Deputy Minister of Home Affairs whether Government contemplate to (Shri Datar): (a) The average time give an opportunity to the people of taken for communicating to candi Bilaspur to place their views about dates the final result of their applica the future of Bilaspur before the tions is less than nine months. In 27 States Reorganisation Commission be eases out of 293 in 1953. the time fore taking any steps to complete its taken was more than nine months, in merger with Himachal Pradesh? cluding nine cases which took four teen months or more. The Deputy Minister of Home Affairs. (b) Every possible care is taken by (Shri Datar): As was informed in the Union Public Service Commission this House on the 4th December Uisi. and also by the appointing authori Government have already decided ties to ensure expeditious selection that Bilaspur should be merged in and appointment of candidates. Some Himachal Pradesh. Necessary steps delay is, however, inevitable on ao- to brinR about such a merger are count of the processes involved in being taken. making careful selection. I may also add that a Bill to thifj efTect will be introduced in the other House either today or at the earliest time. 3PfV ri’T' 'dH ^ 4 Itl 'd'l Shri Anandchand: In view of the Agreement entered into by the Gov ernment of India with the Ruler of i ? Bilaspur on 15th August 1948, which Shri Datar: I shall be obliged i£ the stipulated an obligation on the part hon. Member gives the names of such of Government to administer Bilas instances. My information is that all pur as a separate unit, will the hon. the applicants are duly intimated. Minister be pleased to state whether this term has no^v been dropped from Shri B. S. Murthy: May I know the Agreement or modified in any whether the inordinate delay is due manner? 1075 Oral Answers 15 MARCH 1954 Oral Answers 1076* Shri Datar: I am not aware of any S c h e d u l e d C astes a n d S c w e d l iid T rib es*. conditions under which the Govern a IN P u n ja b ment of India were bound to keep it ♦1021, Shri Ram Daaa: Will the as a separate unit. To keep it as a Minister of Home Affairs be pleased: separate unit is administratively very to state: dimcult. (a) the total amount of grant given^ to the Punjab State for the better Shri Anandchand: Are Govern ment of the Scheduled Castes and ment aware that an overwhelming Scheduled Tribes separately for 1968 majority of the people of Bilaspur are 54; and totally opposed to the merger of their State in Himachal Pradesh, and a (b) the main items for which this petition has already been submitted grant is to be spent? to the States Ministry, recording their protest, and signed by nearly fifty The Deputy Minister of Home^ thousand people? Affairs (Shri Datar): (a) No grant has been made for the betterment of Shri Datar: That is not true. Scheduled Castes as no detailed sche Shri A. M. Thomas: May I know mes have been received from the the total area of this Stale, and also State Government. A sum of Rs. 6 Q- the area submerged by the river val lakhs has, however, been allotted to ley project there? the State for the welfare of Schedul ed Tribes and development of Scher Shri Datar: The total area, if I mis duled Areas. Out of this a sum of take not, is 29 square miles. Rs. 3 0 lakhs has already been san ctioned and the balance will be paid Shri A. M. Thomas: What is the before the close of the financial year total area submerged by the river on the receipt of full details regarding valley project? the actual expenditure etc. incurred by the Slate Government on the va Shri Datar: I am not aware of that. rious schemes including that met from their own funds. «rnfT : ^ A [^3TR f, % fw m TT ^ % »r^T % (b) Educational and Economic de velopment and provision of medical fqT>iT ^ and communication facilitie.s. n t f r % 57TI ftpJTr 3TT t Shri Ram Dass: May I know whe ?fi:iirnT ^ 3TPT 3ft fiT55^ ther the State Government have also contributed to these schemes? ^ 3fh: ^ % Shri Datar: I am not aware of 'TT ft?TT t arVr ^ 1 what they have contributed, but we ^ t ? have not received their detailed sche mes. Mr. speaker: Order, order. Shri Hem Raj: May I know what Shri Anandchand: Is it a fact that sums have been sanctioned for the the Punjab Government have consis development of the Lahaul and Spiti tently opposed the idea of the merger area? of Bilaspur in Mimachal Pradesh? Shri Datar: There are different sums Shri Datar: That question is en for different kinds of work. If the tirely irrelevant. Bilaspur is not hon. Member mentions a n y ' particu going to be merged in Punjab. lar work, I can give the answer. Mr. Speaker: The hon. Minister Shri Hem Raj: May I know the full' may give the information, if he has. amount that has been sanctioned for he different categories of develop Shri Datar: I have no information. ment? Oral Answers 1077 Oral Answers 15 MARCH 1954 1078 Shri Datar: So far as the amouht Sbri A. C. Guha: These figures are for the purpose of eradication of un- in respect of loans granted to refugees touchability is concerned, a sum of from both sides. Rs. 6 lakhs has been sactioned for payment to the Punjab Government. Shri R. K. Chaudburi: Is it not a fact that so far as loan to West Pakistan refugees is concerned, the Sbri Thlmmaiah: May 1 know, Sir* loan register has been closed and no whether the items under which the application is entertained now? amount is being spent in respect of the Scheduled Castes and Scheduled Sbri A. C. Guha: The previous ap Tribes are uniform throughout the plications which were pending are country or they differ from State to now being sanctioned and payment State? is also being made on account of this. Shri Datar: The items are generally Sbri Gidwa^: May I know. Sir, the same. The details might differ whether the Government have con here and there. sidered the unanimous recommenda tion of the RFA and the Advi. Shri R. K. Chaudburi: May I know, Shri S. C. Samanta: May I know. Sir, whether this loan, to which re Sir, when this act of revision was ference has been made, is granted taken up? only to East Bengal refugees or it is granted to West Pakistan refugees Shri Daiar: This act of revision ^Ifo? was taken up about two years ago. 1079 Oral Answers 15 MARCH 1954 Oral Answers lo8 o Shrl S. C. Samanta: May I Icnow they prefer to come over here when why there is unnecessary delay in the they opted for Pakistan at the time revision of the rules? of Partition? Shri Datar: Sir. there is no unne Shri Datar: They come to India cessary delay. We have to consult possibly in the belief that conditions the various Ministries and have to in India are better than they arc consider all the suggestions they make. there. Shri S. C. Samanta: Is it not a fact Shri Bahadur Singh: What are the that the reconfimendations have al special reasons for which they were ready been submitted to the Govern allowed to settle in India? ment and were to be considered by Shri Datar: Only in exceptional the Cabinet? cases are they allowed to stay here longer, as for example, when their Shri Datar: It was true, but ulti relatives or dependants are here and mately two other matters intervened. when they have no corresponding pror There w^as consultation with Mr. Ap perty in Pakistan. pleby, and in addition, an officer, Mr. A. K. Chanda, was appointed to re Shri Bahadur Singh: May I know view all the existing rules and pro what is the number that have been cedure so as to have greater despatch allowed to settle in India permanent of Government business. Therefore, ly? the matter is now awaiting considera Shri Datar: That number is not tion. here, but, it is extremely small and not very large. UN\urHORisED Entry of Pakistanis into I n d i a Shri Bahadur Singh: May I know, *1024. Shri Bahadur Singh: Will the with regard to those who are allow Minister of Home Affairs be pleased ed to remain and settle in India, to state: whether the Government propose to give them their original homes and (a) the number of Pakistanis who lands which they possessed before Par were arrested by our Police for un tition? authorised entry into India during 1953; Shri Datar: That is a question for the Rehabilitation Ministry. (b) the action taken against them; and H y d e r a b a d m o n e y in H n g l is h B a n k s (c) whether any of them were sub *‘‘1025. Shrt Kriahnacharya JTwhi: sequently permitted to remain in Will the Minister of States be pleas India? ed to refer to the reply given to star red question No. 204 asked on the The Deputy Minister of Home 23rd November, 1953 and state: Affairs (Shri Datar): (a) 7,600. (a) the steps since taken by Gov (b) 6,5r5 persons were prosecuted, ernment to realise the money illegal of whom 5,605 were convicted; 39 ly transferred by Shri Moin Nawaj were discharged or acquitted, and Jung to the credit of the Pakistan of 951 are pending trial, 859 High Commissioner; and rersoiis were sent bark to Pakistan, (b) whether any judgment has and the cases of 16 are still pending. been delivered by the Courts of Eng land, on the suit filed by Govern (c) 130. ment in England? Shri Bahadur Singh: May I know. The Deputy Minister of Home Sir. if the Government know the rea Affairs (Shri Datar): (a) The Soli son why Pakistanis come to India citors have been instructed to flic a without getting proper permits—why Statement of Claim immediately. 768 P.S.D. io 8 i Oral Answers 15 MARCH 1954 Oral Answers 1082 (b ) Does not arise. sum total of the turnover of Govern ment business at all their branches in Shri Krishnacharya Joshi: May I India. It is not possible to deter know whether the money belongs to mine the commission payable to them the Nizam or to the Hyderabad State- in respect of any individual branch. Government? • Shri V. P. Nayar: May I know Shri Datar: I believe the money be whether the Government are aware longs to the Hyderabad Government. that on account of the additional work •hri Krishnacharya Joshi: May I of coljecting money for the G o v e r n ^now whether the money was cre ment of India, the employees of the dited in the Bank to purchase arms State treasuries have to do overtime and ammunition as hinted in the work and sometimes have to remain Government of India’s While Paper very late in order to finish their work? on Hyderabad? Shri A. C. Guha: I do not think Shri Datar: I am not aware of that there is any reason for this because, but this money was deposited in the after the financial integration, the Westminster Bank. treasuries were reorganised and addi tional stafX was also given, and new^ Shri H. G. Vaishnav: May I know treasuries were also opened, parti whether the decision by the Court cularly, considering the additional In England has stated that that is work that may come to them for hand the personiil property of the Nizam ling these remittances. und the State Government has noth ing to do with it? Shri V. P. Nayar: May I know whether the Government of India is Shri Datar: I am aware of that but giving any amount to these Travan- from the information available with core-Cochin treasuries for this addi the Government of India, this money tional work which they have neces belongs to ihe State Government. sarily to do for the Government of India? S t a t e T r r a s u r ie s i n T r a v a n c o r e -C o c h I j^ Shri A. C. Guha: I think that would *1026. Shri V. P. Nayar: (a) Will come within the normal relations betr the Minister of Finance be pleased to state whether it is a fact that after ween the State Government and the Central Government. the federal financial integration, State treasuries in Travancore-Co- Shri V. P. Nayar: May I know chin State are receiving remittances whether the Travancore-Cochin Gov due to the Central Govei^nment which, ernment has brought this matter to before integration, had to be remit the notice of the Government of India ted through the Imperial Bank of and whether the Government of India India? has taken any decision as regards the paying of money for overtime work (b) What was the commission paid for these State treasuries? to the Imperial Bank on such remit tances before integration, and what is Shri A. C, Guha: I do not ^ In k the total amount being saved by the there is any question of overfime Central Grovernment yearly on ac work. Additional staff was given and count of remittances of Government additional treasuries were also open dues in State treasuries since 1951? ed. The Deputy Minister of Finance (Shri A. C. Guha): (a) Yes. Sir. W nsT B e n g a l B a n k s i n I . i q u i d a t i o n (b) The commission payable to the •1029. Shri H. N. Mukcrjce: Will Imperial Bank of India for the con the Minister of Finance be pleased to duct of Government business is based state: on a sliding scale which is determined (a) whether Government are aware once in five years and applies to the of the anxiety of depositors and 1083 Oral Answers 15 MARCH 1954 Oral Answers X084 o ther creditors as well as the em High Court who deals with banking ployees of banks in liquidation in companies under liquidation? West Bengal on account of the delay Shri A. C. Guha: I have already in the appointment of a Court Liqui said that the court liquidator has been dator; and appointed. The appointment has been (b) if so, when such appointment made and he has taken over charge is to be made? some four or five days ago. The Deputy Minister of Finance H i n d u s t a n A i r c r a f t L t d . (Shrl A. C. Guha): (a) Yes, Sir. ♦1030. Shri V. P. Nayar: Will the (b) The appointment has already Minister of Defence be pleased to been made. state whether Government haVe any proposals to provide alternative ac Shri H. N. Mukerjee: WiU the Gov commodation to the residents of the ernment see to it that the Court Liqui old bachelors’ quarters and the F dator retains the existing staff of typo family quarters in the Hindu banks under liquidation, without stan Aircraft Ltd.? whose help it would be difficult to find out the acts of omission and The Minister of Defence Organiza commission of the liquidators at pre tion (Shri Tyagi): Hindustan Aircraft sent in possession? Ltd. have already provided alterna Mr. Speaker: Order, order. I think tive accommodation to the residents the matter is sub jndice; it is the of these quarters. jurisdiction of the Court to deal with Shri V. P. Nayar: May I know whe the li'quidator,—not of Government ther the hon. Minister, during his who have no hand in it. recent visit to the Hindustan Aircraft Shri H. N. Mukerjee: The Court Ltd., had been to these quarters and Liquidator in going to be appointed seen them? soon. Shri Tyaffi: I must confess I have Mr. Speaker: By the Court? not been to the bachelor quarters, but I have seen the married quarters. Shri H. N. Mukerjee: By the Central Government. Slirl V. P. Nayar: May I know whe ther Government are aware that Shri A. C. Guha: As for the staff, I these quarters are uninhabitable and think the Court Liquidator has al it is dangerous if these people are to ready been asked to retain as many stay in them? as possible of the old staff. But, I should frankly tell my hon. friends Shri Tyagi: I know that these quar that the purpose of amending the Act ters were not fit for residential pur is to reduce the expenditure, and so poses. They were built during the it would not be possible to retain last war. Alternative accommoda all the staff now employed in about tion is being provided. Two hundred 70 Liquidators’ offices. The concen quarters had been built last year under tration of work in one hand would the housing scheme of the Govern mean certain reduction in the staff, ment of India. It is also proposed to but, I think, I can assure my hon. build another one thousand and three friends that in discharging old hands hundred quarters. All the families no new hand may be taken. living in these quarters have already been accommodated in new quarters. Shri H. N. Mukerjee: Pending the Some new ones are also coming up. appointment of a permanent incum Shri R. K. Chaudhurir May I ask bent, will Government consider the on!y one question? . desirability of immediately ap pointing the Assistant Registrar of Mr. Speaker: I am going to the nejrt Companies attached to the Calcutta question. 15 MARCH 1954 Written Answers 1086 io85 Oral Answers Si.ATu D e p o s i t s (b) for what industrial and other purposes can this mineral be exploit ♦1031. Shri S. C. S*n»mta: Will the ed? Minister of Natural Resources and Scientific Besearcli be pleased to The Deputy Minister of Natural state: Resources and Scientific Research (a) whether slate deposits in the (Shri K. D. Malaviya): (a) Yes, Sir. six States of the country are being (b) Besides its employment in Ato fully exploited; mic Energy, Beryl can be used for (b) if so, how much of our inter the manufacture of alloys used in In nal consumption is met from it and dustry. how much from outside; Shri Bahadur Singh: What is the (c) whether any quantities are ex quantity of beryl that we expect to ported; and produce during 1953-54? (d) if so, how much? Shri K. D. Malaviya: I am afraid I should not give this information just The Deputy Minister of Natural now. It would not be advisable. Resources and Scientific Research Shri Bahadur Singh: Do we export (Shri K. D. Malaviya): (a) Yes, Sir: beryl; and if so, to what countries? these deposits actually occur in 9 States, namely, Andhra, Bihar, Bom Shri K. D. Malaviya: Nothing can bay, Himachal Pradesh, Hyderabad, be said specifically about it. Mysore, Punjab, Rajasthan and Uttar Shri Amjad Ali: Is there any posu- Pradesh. bility of finding beryl in Andhra? (b) to (d). All the slate quarried Shri K. D. Malaviya: A working is consumed in the country and there party has been deputed to Madras are no exports to or imports from area also to carry on investigation. outside countries. Shri S. C. Samanta: May I know for what other purposes slates are used WRITTEN ANSWERS TO QUESTIONS other than for writing purposes? Shri R. D. Malaviya: Slates are used for roofing for floor-tilling and snroffto wdf: wm electrical purposes. TWT ^ f ^ r : Shri S. C. Samanta: Is it a fact that (f:) «rTOT n the consumption of slates in India has decreased and therefore, the slate exploitation is also going slow? Shri K. D. Malaviya: As far as my (?r) w ^ information goes, the exploitation has not gone down. But I cTnnot say anything specifically about the de mand. «rr ; (>r) JTf? frt, wr ? B e r y l *856. Shri Bahadur Singh: Will the The Deputy Minister of Defenrc Minister of Natural Resources and (Sardar Majithia): (a) There is no Scientific Research be pleased to state: acreage of waste land in the military stations in Madhya Bharat but if the (a) whether any fresh sources of Hon’ble Member is referring to camp iJsryl have been discovered in any ing grounds, there are 38 of them parts of India during 1953>54; and which were formerly utilised by the loSy Written Answers 15 MARCH 1954 Written Answers 1088 ex-state Forces for training and Oil Prospecting in Saur .vshtba camping purposes. ♦859. fihri Baiisal: Will the Minister (b) and (c). No special arrange of Natural ReM>urces and Scientific ment other than the general agree Research be pleased to state the pro- ment for the take-over of the State i»ress that has so far been made in Forces assets by the Centre was made prospecting oil in Saurashtra and near- a t the time of integration. The gener about area? . al agreement was that whatever was in use of the ex^-State Forces on the The Minister of Edncatiou and Na date of Federal Financial integration tural Resources and Scientific Re would accrue to the Central Govern search (Maulana Asad): A statement ment. giving the information required is laid on the Table of the House. [See C u s t o m s S q u a d Appendix IV, annexure No. 9.] *rtl7. Sbri Raghuramaiah: Will the Minister of Finance be pleased to N ational P hysical and C hemical state: L a uoratories *890. Shri Gidwani: (a) WiU the (a) whether the Customs Squad Minister of Natural Resources and operating in the Karwar-Goa land frontier recently seized B large quan SciettHiic Rekeaftfa be pleased to state the annual recurring expenses on Na tity of gold which was being smuggl tional Chemical Laijoratory, Poona and ed into India by a taxi; and National Physical Laboriitory, Delhi? (b) if so, the amount of gold so found? (b) What is the expenditure on the salary of the sta?T in each Laboratory? The Deputy Minister of Finance (Shri A. C. Guha): (a) a n d (b). The (c) Have any students been admitted Customs Flying Squad, Supa, re in any of the Laboratories for Post covered 15,850 tolas of gold in all graduate degree? fro m a taxi going from Karwar to Hubli; the gold was suspected to have (d) If so, is it intended to cont^erl been smuggled into India. these Laboratories into affiliated Uni versity Laboratories? O rientai . G overnment SBClmitY L ht . AssimANCE Co. The Minister of Education and *1027. Shri ftagburamaiah: Will the Natural Resources and Scientific Re Minister of Finance be plealsed to search (Maulana Acad): (a) and (b). state: A statement giving the required in formation is laid on the Table of the (a) whether it is a fact that the House. [S'ee Appendix IV, annexure Oriental Government Security Life No. 10.] Assurance Cothi)any proposes t6 con vert itself into a mutual Company; (c) Yes, Sir. (d) No, Sir. (b) whether Government have ac corded their consent to the proposal; SociAi. W elfare O kii ANIsations and ' 187. Shri N. Rachiah: Will thv (c) what are the conditions subject Minister of Education be pleased to to which the consent has been accord state: ed? (a) the number of social welfare The Deputy Minister of Finance organisations, to which financial aid (Shri M. C. Shaih): (a) Government has been granted by the Central So h a v e not receiv ed any formal pro cial Welfare Board in Mysore State posal from th e Company under Section up to 31st January, 1954; and ^0 of th e Insurance Act. (b) the total amount of assistance (b) ami (c). Dn not arise. given to the State so far? P.S.D. Written Answers 15 MARCH 1954 Written Answers 1090 io89 The Minister of Education and Na Governments on account of Govern tural Resources and Scientific Re ment of India's share for the previous search (Mauiana Azad): (a) 27. years. (b) Rs. 68,200/ Hindustan Aircraft Ltd . Elections 189. Sliri V. P. Nayar: Will the Minister of Defence be pleased to 188. Shri K. C. Sodhia: Will the state: Minister of Law be pleased to state: (a) whether Government are aware (a) the total expenditure incurred that a large number of employees during the current year in connection working in the Rail Coach Section of with (i) the preparation and printing the Hindustan Aircraft Limited, Ban* of electoral rolls and (ii) the conduct galore, are exposed to the danger of of elections and by e-elect ions; inhaling foul air as a result of the spraying of thinners and nitro-cellu- (b) whether any amounts were lose paints; and paid to the State Governments for (b) the steps taken if any, for pro this purpose; and tecting the workers in the rail coach (c) if so, how much to each? “Hangar” shed? The Minister of Law «uid Minority The Minister of Defence Organiza Affairs (Shrl Biswas); (a) A statement tion (Shri Tyagi): (a) and (b). There is laid on the Table of the House is no spraying of thinners and nitro [Se9 Appendix IV, annexure No 11.1 cellulose paints in Hindustan Aircraft (b) and (c). Expenditure on the pre Ltd.’s Railcoach Factory and, there paration and printing of electoral rolls fore, the danger of inhaling foul air as and conduct of elections and bye-elec- a result of such spraying, does not tions to Parliament and Statf* i-.egisla exist. tures is incurred initially ty the There is, however, general painting State Governments. Payments to the work in the Railcoach side for which Stale Governments towards the Gov Hindustan Aircraft Ltd. have pro ernment of India’s share of expendi vided— ture are made towards the close of the financial year provisionally ‘on ac (1) a well ventilated sepcrate count* pending final adjustment later building, on the basis of audited flgares. Pay (2) protective clothing to workers ments proposed to be made to the (3) free supply of m.'lk to main State Governments during the current tain good health, financial year are shown in column 4 of the statement referred to at (a) (4) respirators to avoid inhaling fumes; and above. These payments are not con fined only to the Government of India's (5) adequate washing facilities. share of election expenditure for tbe Proposals are under way to instal a current financial year but also relate to suitable paint fume extractor system the arrears due to be paid to the State at a cost of Rs. 15 lakhs. Contents Monday, 15 th Marcft, 1954 Papers laid on the Table— 1.— Appropriation Accounts and Audit Reports, Defence Services , . 22I5 2.— Notification No. S.R.O, 8 1...... 2 22l6 3.— Estate Duty Rules and Estate Duty (Controlled Companies) Rules . 2216 Statement re reduction in the rate of interest on loans granted by Rehabilitation Finance Administration...... 2216—12217 Presentation of Petitions on Finance Bill ...... 2217— 2218 Untouchability (Offences) Bill— I n t r o d u c e d ...... 2 2 I g ^ General Budget— General Discussion— Not co n clu d ed...... 2218— 2262 Commonwealth Finance Ministers’ Sydney Conference...... 2262-^2322 THE PARLIAMENTARY DEBAxiS^ (Part II—Proceedings other than Questions and Answers) OFFICIAL EEPOET 2215 2216 HOUSE OF THE PEOPLE N otification No. S.R.O. 812. Monday, 15th March, 1954 The Deputy Minister of Affaiis (Shri Datar): I beg to lay on The House met at Two of the Clock the Table a copy of the Ministry of States Notification No. S.R.O. 812, [M r. S peaker in the Chair] dated the 7th March, 1954, publishing QUESTIONS AND ANSWERS the Proclamation made by the Pr^i- dent revoking the Proclamation made See Part 1 by him on the 4th March, 1953. [Placed in Library. See No. S—73/54] 3 P.M. (i) E state D u ty R ules “ PAPERS LAID ON THE TABLE (ii) Estate D u t y (C ontrolled C o m ( i) A ppropriation A ccounts of the p a n ie s ) R u l e s. D efence S ervices for 1951-52, and C o m m erc ial A p pe n d ix thereto The Minister of Finance (Shri C. D. TOGETHER WITH AUDIT R ePORT THEREON Deshmnkh): I beg to lay on the Table a copy of each of the following Rules, (ii) A udit R eport, D efence S ervices, under sub-section (3) of section 85'of 1953. the Estate Duty Act. 1953:— The Minister of FinjUice (Shri C. D. Deshmiikh): I beg to lay on the Table (i) The Estate Duty Rules, 1953 a copy of each of the following papers [Placed in Library. See No. S— under article 151 ( 1 ) of the Constitu 74/54]; and tion:— (i) Appropriation Accounts of the (ii) The Estate Duty (Controlled Defence Services for the year 1951-52 Companies) Rules, 1953. [Placed [Placed in Library. See No. S— Ui, Library. See No. S—75/54]. 70/54.]; (ii) Commercial Appendix to the REHABILITATION FINANCE Appropriation Accounts of the De ADMINISTRATION LOANS fence Services for the year 1951-52 and the Audit Report thereon The Deputy Minister of Finance [Placed in Library. See No. S— (Shri A. C. Gnha): The question of 71/54]; and reducing the rate of interests on the loans being advanced from the Reha (iii) Audit Report, Defence Services, bilitation Finance Administration has 1953. [Placed in Library. See No. been under the consideration of the S -7 2 /5 4 ]. Government of India for some time. 23 P.S.D. 15 MARCH 1954 General Budget 2218 2217 Finance Bill [S hri A. C. Guha] It will be recalled that during dis Shli K. K. Baan (Diamond Har cussions on the Rrfiabilitation Finance bour): I beg to present a petition, Administration (Amendment) Bill in signed by seven petitioners, in res- Parliament last seag^ fuqh l^ect of the Finwice Bill, 1954. suggestions were maSe, I lin^^odk to exwiBe tli« mattw. UNTOUCHABILITY (OFFENCES) The Rehabilitation Finance Ad BILL ministration is at present charging 6 The Deputy Mtolster of Home per cent, rate of interest with a Affairs (Shri Datar): I beg to move rebate of 1 per cent, on regular pay for leave to introduce a Bill to pres ment. The Rdaabilitation finance cribe punishing ior the practice of Administration is meant to be run on untouchability or the enforcement of btuiness principles as distinguished any disability arising therefrom: from other measures of Government for the relief of refugees. Already BIT. W eaker: The question is: the interest charged to the Adminis "That leave be granted to intro tration on the fimds made available duce a Bill to prescribe punish by Government is 3 per cent, which ment for'the practice of untouchr is lower even than the Government’s ability or the enforcement of any own borrowing rates. disability arising therefrom.” Nevertheless, with a view to help The motion was adopted. ing the rehabilitation of refuge^, Shri Datar: I introduce the Bill. Government has decided that with effect from the 1st A pril 1954, on all loans granted or to be granted GENERAL BUDGET by the Rehabilitation Finance Ad Mr. Speaker: We shall now pro ministration up to and including ceed to the discussion of the General Rs. 20,000, the interest should be 4J Budget. I have to announce to the per cent, for the first five years and House that for the benefit of hon. 5 per cent, afterwards with a rebate Members, I would like to draw their of 1 per cent, in both cases if and so attention to Rule 225(1) regarding the long as there is no default in the pay scope of the Budget as defferentiated ment of interest or instalments. from the Finance Bill. During the Loans for amounts exceeding Finance Bill, grievances may be Rs. 20,000 will, w ith effect from th e brought to notice. That will be the same date, bear the rate of interest proper occasion for that purpose. So at 5i per cent, with a rebate of 1 far as the discussion of the Budget is per cent, if and so long as there is no concerned, under Rule 225(1), the default in payment. House will be at liberty to discuss the Buaget as a whole or any question of The Administration is being asked principle involved therein. The dis to propose an amendment of the cussion will be regarding the point regulations to give effect to this whether the items of expenditure decision. ought to be increased or decreased having regard to the importance of a particular head and also the manner FINANCE BILL in which the Budget is framed. Grievances not related either to the P resentation o f P e ii t i o m s Finance Minister’s speech or not Shri Jaiigde (Bilaspur—Reserved— directly arising out of the proposed Sch, Castes): I beg to present a expenditure will not be in order at petition, signed by a petitioner, in this stage. They may be deferred for r^ e c t of the Finance Bill, 1954. ventilation at the time of the Finance General Budget 219 General Budget 15 MABCP 2220 BiU. U nder rule 225(3) I manage through the year. Now, Sir, Uteen minutes will be the time-limit I woiUd like to point out that most st^dinarily for every hon. Member, of ^ e receipts have increased on the excepting the Finance Minister |for rev « iu e side. In 1951-52 on Hhe reve wtiom one or . more ^iU be allow nue side the budgeted estimate of ed, if necessary. receipts was Rs. 402 crores, while in the revised budget it was Rs. 497 So far as Leaders of particular CTores; and actuids Rs. 515 crores. lii Grqvps. are conc^ni^ if t^^y w ^t 1952-53 the revenue side showed a some more time, ^ y can tal^e up to budgeted estimate of Rs. 404 crores; a mMimum of thirty minutes, but this the revised amount was Rs. 418 <^res extra time will be accounted against and a c tu s^ Rs. 435 crores. Sim ilarly, the time allotted to the particular with regard to the expraditure side, Group. the expenditure was estimated at Rs. 375 crores in 1951-52, the revised estimate is Rs. 405 crores while the Shri Tulsidas (Mehsana West); Sur, actu a^ are Rs. 387 crores. In 1952-53, I thank you for giving me the'^oppor 401 crores was the budgeted tunity to make my observations on the figure; the revised estim ate is Rs, 423 General Budget. Let me, at the out set, congratulate the Finance Minister c r c ^ and the actuals is Rs. 396 crores. for the stable financial policy which has created iihe least possible distur [Mb. Deputy-Speaker in the Chair.] bance and the gradualness with which he has adopted the financial policy What I do want to point out to the hon. Finance Minister is that in the course of his four Budgets to the needs of planning. His success is though I had called it as conservative partly due, in my opinion, to the con finance, and a conservative Budget, servative policy that he has been able as we baiters usuaUy do, it is not to continue throughout these four really in good interest that he has years of budgeting. framed this budget in a most con servative manner. I feel the differ ence between the budget, revised and Sir, I ^all illustrate why I call that actual which is, in my opinion, much as a conservative policy. He has more conservative. It is intended to always been under-estimating reve maintain taxation at a level that is nues and capital receipts and over higher than is warranted by the estimating expenditure and capital actual needs of the Grovemment. This disbursements. In the budget year results in tSie imposition of taxation 1951-52 the overall deficit w as to the which is heavier than it need be. tune of Rs. 78 crores as budgeted. In the revised budget the overall deficit Hie Minister of Commerce and In was Rs. 96 crores; the actual was a dustry (Shri T. T. Krishnamachari): surplus of Rs. 1 crore. In 1952-53 the What about the deficit? budgeted deficit was Rs. 76 crores; the revised estimate was Rs. 82 crores and Shri Tulsidas: I am talking of the ’ the actuals Rs. 46 crores deficit. The previous years. I ?an not talking dilference here is Rs. 30 crores. And about 1954-55—1 w ill come to that now in 1953-54 the budgeted deficit later on. was Rs. 138 crores; revised estimate was Rs. 128 crores. I do not know I find that the hon. Finance Minister what the actuals will be. That we will is afraid of making any major change be knowing only next 3^ear. in the taxation structure. He has Sir, we have also b e ^ told that In the made certain changes, particularly in year 1954-55 we will have a deficit on the excise duties and import duties. the revenue side of Rs. 14 crores, and He has rightly pointed out,—and I with the am ount of Rs, 250 c r o ^ of know this year most of the Budgets deficit finance, we may be able to even of the State Govermnent have 2221 General Budget 15 MARCH 1&54 General Budget 2222 [Shri Tulsidas] m entioned »that,— th at till the T axa Sir, I am quoting a portion from tion Enquiry Commission’s report is that communique: out, no major changes ^ould be made “We have reaflfirmed our deter in the taxation structure, but he did, mination to press on with deve naturally, find that some change was lopment, in conformity with our necessary. If that is so, I do not know general policy, to #the lim it of why he has not gone further and made available resources. In some of whatever changes that were necessary our countries private enterprise in order to increase the productivity and the savings of the country which is making a large contribution to he thought necessary even before the development.” report of the Taxation Enquiry Com I would like you, Sir, to mark the mission. sentence that follows. “Governments will be concerned If the Taxation Enquiry Commission to promote balanced develop makes recommendations of a different ment, whether public or private, nature, or some. changes become to pursue policies designed to in necessary, then, I do not think there crease the flow of savings, and to would be any difficulty in making encourage private investment from those adjustments. When excise both internal and external duties on different goods and an in crease in the import duty on betel nut sources.” have been introduced even before the I mean there are different places report of the Taxation Enquiry Com where these changes in the taxation mission, this is, in my opinion,—^if I structure are being pointed out and may use the word,—an omission on I am sure the Taxation Enquiry Com the part of the Finance Minister. mission will recommend whatever adjustments are necessary. I do not I clearly see from his speech that he wish to dwell on this particular pro does not wish to make any change blem, but I do feel that the present though there may be a necessity for high level of taxation discourages pro changes in the taxation structure. He ductive effort, inhibits the flow of has not spoken anything with regard savings and discourages investment in to any change. I feel that this is a industry. The private sector, even in sort of omission. All important the Plan, has to shoulder the res> countries, such as U.SA., UlC., ponsibilities for the bulk of the invests Australia, Grermany, etc., have made ment in industry and almost aU the changes or are going to make changes investment in trade. This responsibility in the near future. They have done it cannot discharge on its own at the this in order that the productivity of present level of taxation. I know that the country may increase. Our taxa tion system has been in operation the Finance Minister has mentioned from the time when there was an in his speech and the Government ha» inflation soon after the war, and we realised that there is a sort of lack will have to adjust it on the basis of of capital available to the private the needs of the country for increased sector. For that reason the Govern savings, increased production and in ment has floated Industrial Finance creased investment. ThCTefore, the Corporations. In fact they have gone policy should be changed to suit the further. As even the Industrial needs of the country. Our Finance Finance Corporations are not meeting Minister was a party to the decisions the needs, they have gone further, reached at ttie Commonwealth Finance and the Reserve Bank has appointed Minister’s Conference held at Sydney the ShrofT Committee to look into how and that is why this omission, I say, capital could be made available to th# is all the more glaring. private sector. Further, as the Finance 2223 General Budget 15 MARCH 1954 General Budget 2224 Minister has mentioned in his speech, the private sector directly to retain a two new Corporations will be floated greater proportion of its internal re in order to see that increased re sources instead of giving back to the sources are made available to indus private sector in a round about w a y try in the private sector. It is also a part of the resources taken away very signiflceint to point out here that from it by way of taxation. That is even in the public sector the borrow what I have been trying to point out ings have not , been as successful— and even in the Bernstein Report this according to the words ol the Finance has been pointed out. It says: , Minister, it has been slightly dis appointing. I would be happy to hear “Business wiU not be able to Irom him that I am not correct. But save if price controls squeeze pro that shows that with this increased fit margins too tightly or if taxes taxation which we have been having are excessive. Both the remain all these years for particular pur ing price controls and taxes on poses—we are taxing much more for corporate profits should be re the needs which have been shown in examined with a view to facilitat the Budget—the object has not been ing internal flnancinj? by business attained, because on the one hand the of capital outlays for replacement moneys have been withdrawn and on and expansion.” the other the moneys necessary to be This high level of taxation has been put in for our economy have not been continued even after it was known to put in. That has not been gone into. have reduced capital formation in the It has been a sort of contraction. And private sector on the ground that it that reflects the unavailability of the causes a shift of investment from the capital requirements in the private private sector to the public sector. sector as well as in tihe public sector. But. that does not happen. Experience Therefore even the borrowing pro has shown that the loss of private gramme of the Government have not investment has not been made good been so successful; they are rather by a corresponding increase in public disappointing. investment. Here again, we feel that there is not enough purchasing power The returns in the receipts from and we must therefore, pump some the other sources also are diminish money. According to the Budget ing—I am not saying with regard to figures we have not been pumping the the budget proposals—^but with regard money, but we have been taking the to each type of taxation the returns money by way of taxation. That is are diminishing. I do not wiA to what I am trying to make out. dwell upon the point of high rates of ' the taxation of income and also in- :flation, which together have been^res- Taxation on industry and trade has, ponsible for the erosion of industrial in my opinion, been kept at a high capital to the tune of hundreds of level on the assumption that the Gov *crores of rupees, especially owing to ernment‘would be able to maintain a the faulty practice of calculating certain level of investment expendi depreciation on the basis of historical ture, but since the actual amount of instead of replacement costs. That is investment is considerably less than one factor by which industry does not the assumed amount, the public is let sufficient internal resources to re^ called upon to bear a burden of taxa habilitate or to put any more capital tion that is not commensurate with goods. I am sure, as I said before, the benefits obtained by way of ^is would be looked after by the development. Sir, I have dwe?+ or this Taxation Inquiry Commission. But, I point at length and I would ratiier ^ould like to emphasise here that it request the hon. Finance Minister to y^ould make more capital available to go into this point and say whether industry if the Government allowed the point that I have tried to explain: 2225 General Budget 15 MARCH 19S4 General Budget 2226 [Stari Tulflfalas] U ttbt tint r til ctfiise t&t th^ knd% h W we M»mi be ablfe to fthd sector not hftvihg the cafiiM or rfeibuwes tor a b ig t» P^jan. We liia r resources availAbte. that it be 6f tlte oMer tif Rs. 7,000 sothe 3ay Ife. tapores; th e I would like to mention thie qu^tetion p a p c ^ Say 6 "or - ? tliottsiand ciialires, d deficit financing. The I'inahice it is, ft th a t it Minister in his speech has very be biggeSr thah the First Five rightly pointed out that this is a Year Plan. It was ihenttoned in the matter which has to be hanclli^ in a Preaihble of the Plan th 6t the sav- father difificult inahner. I foow th at Ihgs '#hich were 5 per cent. In the as long as Shri C. D. Deshmukh is biiigihhmg of the Plan would be in- there we kre in safe h^ds, that he c r e a ^ to 6-7^ pei: tent, at the end will be able to control, arid the deficit of the Piiin. I would Uke to know firiapcing will not have inuch ^ e c t from the Finance Minister what ihdi- I have mentioned many times before cation he has got to show that the my views about deficit financing. The Savings have gone up and, if so, to Finance Minister sa^ that the climate what extent. If the savings have not is now better; and because the climate gone up, I do not know hbw he will is belter, he feels that deficit financ bef able to get Iresources both in the ing should now be resorted to. Now, priviate sector and the public sector Sir, with regard to the climate, he for the Second Plan which is now ihas mentioned th at we have increased being planned, which may be of a our production. I agree that there is larger majghitude. If we go on with an increase in production. But, the deficit financing, as a last resort, I do increase is not so much and if slightly not know how that will work. Deficit the balance goes the other way round, financing is a very easy way of pro it m ay caase a certain amount of ducing money. During the Railway difftculties. Therefore, he will have to Budget disciissions, many Members be rather very cautious, and I am said now that we are embarking on sure ho will be cautious. I see in his deficit financing, why not spend more? speech in the other House ihe has Similarly wihen we consider the def-nitely said that, if he finds in Demands of the various Ministries, we course of time that the conditions are will hear similar expressions in the not so good, he will even go to the House, and even some of the Minis extent of reducing the expenditure. ters may naturally expect some more I am very glad that he has said so money. I would like to lay stress on in the Council of States, Under his one point. I only hope th at this ex-^ care, I have not the slightest appre penditure win be on productive pur hension that there will be any diffir poses and not on unproductive pur^ culty with regard to deficit financing. poses. I am sure the hon. Finance But, I would like to point out to him Minister will look into the matter and. that now that there is going to be see that the expenditure is on pro^ deficit financing of such a magnitude, ductive purposes. simultaneously, as has al^ "been referred to by him in his sp^lt, we Then, I come ,tp a very im portant must come back to a certain ambunt poi^t. 7he hon. Finance M in^t^ ba» of normalcy. We hfeve to ^eate con- mentioned in his speech: aitioiii f6t a (S^rtain amount of licir- maiey to tome b ^ Snd it must conie withm k «6uple of 3%6rs, or ttiiee Or •‘The bu^ deficit fthahci^i^ four years. We are nbiv on the thi^ tfhTs ye^ar ahd th e fcohiitig year ^ shold <>t the Second’ Five Year PIot Tie rtiofe fh ^ actbunted tor bjr when rea^rces win be re^uiired in a th^ Oentril assistafice to th^ «iuch larger nia^t^d<5. iTnless we ^ f e s for their development weate those conditions, we do not schemas.** I I u m m i m €ftnerul Bud^t 2228 This is a very important question. m eant for the dev^QpfiMept qt ^ n e , Here Hire v [Shari Tulsidas] I have not been successful, excepting which may mislead us somewhere, but in the case of two or three. I would I hope the vigilant eyes of the hon. therefore suggest that Government Finance Minister. and the Finance should agree at least now, to the Ministry will see that they put the appointment of a Parliamentary com reins when and where it is necessary. mittee or commission, to go into these matters. There is no question of a n y This Budget is pre-eminently a plan party politics here. As the Parliament budget. This has been willed and plan of India, sanctioning the money for ned so that it may effectively put into the various projects, I think, we operation the Five Year Plan that we should all unanimously agree to the have got. The original Plan was for a setting up of an organisation to sum of Rs. 2,069 crores, but the scrutinise the expenditure on the amount has been further increased State projects, and also the working by Rs. 175 crores. so that the total of the private limited companies. outlay on the Plan comes to Rs. 2.244 I hope the hon. Finance Minister crores. out of which nearly one will look into all these matters. thousand crores of rupees have been spent during the last three years, and Shri T. S. A. Oietttar (Tiruppur): about Rs. 1,244 crores still rem ain to I am not accustomed either by train be spent. Our problem now is how to ing or by habit, to vainly congratu find that money. late those in power. But today I believe I am sasdng something more If we look at the revenue side as than a ^formality, when I say the hon. well as the ways and means picture, Finance Minister deserves congratula we find that the revenue deficit is tions for what (he has submitted. Rs. 26 crores, capital investment Rs. 395 crores. repajrment of loans etc. With the achievement of independ Rs. 53 crores, all of which comes to a ence, there has been a surging enthu total of Rs. 474 crores. If we look at siasm on the part of our people in the details as to how this amount is this great country, and new India is sought to be met. we see the dangers, also taking shape before us. We see so far as our achievements are con tremendous activity everjrwhere. and cerned. The way in which it is sought it has been our purpose to utilise that to be met is as follows: activity in proper channels. Firka development schemes,-community pro Loans in market—^Rs. 75 crores. jects, national extension schemes, etc. Foreign assistance—Rs. 48 crores. have helped in our work. Food pro duction has increased, and fortunately Small savings—Rs. 45 crores. nature has helped us with timely Miscellaneous dues and rains this year. Industries have remittances—Rs. 56 crores. reached their peak production. Prices Deficit financing—Rs. 250 crores. have been stabilised. Deficit financing, over which we were so much afraid, When we study these figures. Sir, I has not done harm. find that they have got certain features over which we should be well In addition, to develop industries warned. In the coming years, I doubt in our country, industrial develop whether we can take credit for that ment corporations are in the making, foreign assistance which we have and the Intemational Bank has taken in this budget. Wit^ the trend been consulted as to how best of eyents in the world, witli the way they can help in setting up in which things are going on—I should those corporations. Only one word of not like to explain further—we do not warning, I would like to say, and know how the feelings of those that is this. Once we are accustomed portions of the world which are assist to deficit financing, it is something ing us today will be in the coming 2231 G^*eral Budget 15 MARCH 1954 General Budg^ 2232 years, and I think we will be well should help the States in finding that advised not to rely on these Rs. 48 portion w'hich is necessary for them crores of foreign assistance in the to find. It is rather unfortunate that coming years. In the same way» cus in the States* portion, lies one of the toms have been giving us a very good most important aspects of our social revenue. But this year’s budget has services, namely, education. To my shown that our income from customs mind, education is perhaps the most has been dwindling and it is up to us important thing in national regenera^ to find out whether we will have alter tion, because if we are to develop native revenues to meet these two and eflficiency, if we are to develop greater other deficits. productive capacity, if we are to have greater intelligence and greater effort, There are also certain other features the basic thing is to give the proper which we ought to take into con type of education. That unfortunately, sideration so that we may be fore has been put to the States* share. The warned, so that we can find out alter responsibility that has been taken by native methods; if we cannot find the Centre in education is so very altemative methods, we should con small that Rs. 8 crores has been sider whether we should not go further allotted for the whole of India in this in taxing our people in our own budget. Many States are not able to country. find the portions that come in for their Sir, I feel that one of the obstacles responsibility so far as education is in the way of the putting into effect concerned. How are we going to put of this Plan is the weakness of our the Plan effectively into practice? I State Governments. I find that many appreciate the priority being given to of the States have not been able to agriculture; I appreciate the priority gather enough money to put in their^ being given to irrigation and power, share of expenditure. If I may give because they are necessary. Food must an example—and I am giving Madras, be produced so that the laxige drain my own State—I find that Rs. 92 that we have been incurring by im crores was the amount to be spent porting food may be avoided, so that under the Plan by Madras, out of we may be self-contained in such a which Irrigation and Power account vital matter as food. But more vital for Rs. 50 crores, Agriculture and perhai>s than this is education and allied subjects take Rs. 18 crores, yet education has been, ahnost wholly, Social Services and Education Rs. 19 put into the States* share. That is a crores, and Miscellaneous Rs. 5 crores. weakness of the Plan, and unless we I find that except for irrigation and help the States to cover that part of power, the expenditure for which they the amount to cover that part of the propose to cover by loans, and for Plan. I think we will be failing to , agriculture and allied subjects, whicb that extent. account for Rs. 18 crores and which So I would like to suggest that if they propose to make somehow, for the Plan is to succeed as a whole, not the most important aspect of the Plan, only is it necessary that the centr® namely, education and social services, should see throu^ these priorities they have been ^ unable to find the given according to the Plan, but money. There is a gap of nearly Rs. 2-5 wherever possible, whenever possible crores and we ought to see how we and as much as possible, we should are going to help the States to cover help the States to get through their these large gaps of deficits that they plans with regard to education and are having. This Plan is a composite other social services. whole. It is not enough if the Centre merely finds the am«ant, its part of I would like to suggest some con the share. It is also necessary that structive ideas through which these the Centre, with its large resources, obstacles may be overcome. They may 2 2 si General ii M k M toSi 2234 E ShriT. S. A. Q ieti^] dfefects; but they are points im a s of money, w 6iild k grelat %e mdjr extamine. Tliese m a i^irdly, I think, we imbtild lilakt the jfcW potats wMch 1 would suggest people plan consciouis to that these before I go further. may be acceletat^ We have received the reports of tbe dn ^ Tn^%\€t i^ ic h 1 think ihis H ot^ Fikblic AccxHmts Committee and it has ^ u l d fike tt) heat is kbbut been p^ted out many times that worsening of the cotiditlbhB of Indlatts there has been wast^e on many of in Ceyidii. Hon. Mefhbers are full 2^ the big project. I think we should aware that a certain agmntent «ramine» whether the money is pro- entered into between the Prime Minis piBily ^?ent or whether it has been ters of India and Ceylon. We find vt^Ssted through corruption or other- that certain acts are being done in wiise. It has been broicght to our Ceylon so that this agreement is not jfiotice through the reports of the given a proper trial. I would like ta Public Accounts Committee that there read a small passage. have been a few cases in which wast age could have been avoided. When **The Ceylonization policy of the we are spending large sums of mone^ Government as emmciatea by and when we are getting that money the Labour M inister. Dr. M. C. M. with very great difficulty, it is our Kaleel, last week is to be first duty to see that in all these projects implemented in Colombo and we have proper financial control. We then ^adually extended to other must have some persons to go through afteas.” ^ese things and see that not even one pice more than is necessary is spent ‘'A spokesman of the Congress on these proj^ects. said that the Confess was in dined to interpret the Govern Sir, there were two bridges which ment’s move as an indication of were very similar—one in Northern their intention to use emplo 3rment India and the other in Southern as a lever tc drive Stateless perr- india,—which had almost the same sons to embrace Indian nationality specifications, but for the one in so that they could be eventuallj Northern India we spent more than repatriated. double of what we spent in Southern India. It also formed the subject of Under the last census figures in questions in this House. I see no a population of nearly one million reason why there should be so much persons of Indian origin, over difference between these two projects eight lakhs are Stateless. The with the same specifications. It is up former Prime Minister of Ceylon^ to us and for the Finance Ministry to Mr. Dudley Senanajrake, had esti go into these cases. mated in June last that about half the number of Stateless per I have been sugjgesting one way of sons would become citizens in the taxation, taxation through labour. I course of a year under the ihink most of the works that are Citizenship Act. Since then, “how being undertaken in the districts, in ever, the ratio between acceptance the States are amenities to villages: and rejection of applications is dispensMies, roads, schools and such understood to have radically other things. I am one of those w‘ho altered. In the last three or four believe that in a country where the mwnths the number of applica scope for taxation is so low as in this tions rejected is understood to country, where the taxable wealth is have risen very considerably so so Smidl, isases by way of labour can that Indian circles fear that at Tield an amount of work which, in this rate not more than one and 2^35 is kKSfeti i t k c « * e iii a m e t 2 2 35^ a half laikh out b i the tbt^ of the fault will certainly-^M l»e l£^t of eight lakhs would qualify fdr Hie Mini^. ^ han tal^ ji citi^mship tm s ^ I d itsk, namely, df raising dfficit fiiiance. over six and a tiW littlSis Of ^ s tl^ T b s ^ is. . .Jiotfaing: w9»mg about' i t lkm» vrnm h» Stateless in-ttie UAffer ooKtroUed ,«ircufQ 5tances. As^ a. l^fH ^t ^iirciiltnstcm they vw^ cautious man by ^^ure. ^ wbiHd he Mked ttt w a ster tbao^ tempersn^nt and'by experiiSM^, s^ves as Indian natM»n»te it ^hey has tcikeh every pn^autioa to see that wished to continue in their jobs.” any moment be can withdntw it from, the field of experiment without smy I should point out that our Govern serious damage to our ^economy^ ment should take note of this and see Therefore, I am entirely one with him. that whatever iiappens, these unfol:- in this respect t u ^ t e a1^ not disturbed firom their employment, becau!sie a l a i ^ number of them are born and bred up lliere is only one littlb postscrit>t in that country. that I want to add to thik, nahirfy, that It works as an indirect taxaiion. Shri 6 a ^ (Poona Central): N(^- Oii Ihfe whole commtmity, arid to that ing is perfect In this worl 4 «md there ektent, the richer classy have escaped^ fore, to predicate that this yearns T hat is m y grievance. If he couUL Budget will be a perfect one is wrong. have lessened the deficit amount h r 1 have been in this House for a long raising additional direct taxation, 1 period and I do not remember even a would have been right glad, but this, single budget which has been approved time he has a very good excuse,, without exception by every quarter of namely, the Taxation Enquiry Com the country. Tlierefore, the Finance mittee is sitting, and after its labours Minister must be ready always to are completed and its report is sub receive a fair mixture of congratulfr- mitted, I am sure he will take all tions and criticism, sometimes well those recommendations into conside expressed and sometimes warmly ex ration. pressed. So far as I am concerned, I am My own fear is that the Taxation: inclined to congratulate him, but I Enquiry Commission will not recom have deferred that till I see the final mend any radical change in the sys shape in which the Finance Bill is tem of taxation. That is because the passed. terms of reference, the composition^ and the social outlook of those who- Dor. Xaalca Sondaram (Visakhapat- are concerned with it do not justify nam): Thereby hangs your talel a belief of radical recommendations coming from them. Secondly, the role Shri GadgU: That only shows that of any Taxation Enquiry Commission I am.... is to work within the framework of Shu Veiayiidluui (Qtiilon cum Mave- <|ie economic policy propounded by likkara—Reserved—Sch. Castes): Cau the government of the day and in this: tious? case the Government of the day has not made up its mind whether the Shri GadgU:.... no, but that I am econoriiy could move towards nations^ very fesp [Sbri Gadgil] Shri S. S. More; No thanks to the other that may come in its place, to House? see that the system of taxation is in Shri G ad^: That is so far as direct •consonance with the realisation of the tsucation is concerned. ideals as stated in the Constitution Now, I am not against indirect tax itself. I therefore say that the recom es. - I honestly feel that this country mendations, as I visualise them, will belongs to the poor, and there must :not be radical. I mean no reflection on therefore be no section which is rich. the Committee. In view of this, I am requesting Government to make its Shri R. K. Ghaadhuri (Gauhati): [policy clear. Once poor, always poor! 4 P.M. As far as I am concerned, I have Shri Gadgil: If this country belongs ^ome to the conclusion that so far as to the poor, we must all help in the direct taxation is concerned, there implementation of the Five Year Plan ^should be no tax below a certain No. 1, No. 2, No. 3 and so on. If the minimum and there should be no responsibility for raising the standard income beyond a certain maximum. of life is to be shared by everybody *The range between the m inimum and and everybody is to put his shoulder Ihe maximum may be adjusted from to the wheel, I welcome indirect taxes. time to time, but if somebody asks But there must be equity between -.me to give an indication of my mind, citizens and citizens and there must .1 am prepared to say that there should be equality of sacrifice. Am I asked to 3>e no income tax on incomes below give finances for a Plan in which I Bs. 5,000 and there should be no find the emphasis shifting gradually Jncom e above Rs. 30,000. We have to from the public sector to the private .see that we bring about a society in sector? I do not want to dilate on this, -wWrfi there will be no vast differences because I have not got the strength in economics, in wealth and in hairi enough today. All I say is that there ness, and that is possible only if we are two tendencies clear. One is that limit the two extremes of income— every effort or every wooing is done the maximum and the minimum. I am to make the private industrialist do .not asking Government to give the .this or do that, because Government Tange here and now. I am asking them feels that they cannot meet the pro to agree in principle that beyond a blem of unemployment unless they -‘C e r ta i n maximum there will be no enlist the sympathy and co-operation dincome, and at the same time, beyond of the private sector on their terms. ra certain minimum there will be no AU sorts of concessions are therefore ^direct tax. being made. Prices of raw products are controlled in their favour and I am happy that so far as the there is no control on the finished pro -estate duty is concerned, it is already ducts, whioh can be sold whenever -the law of the land, and those classes they can get the highest prices. So which are to be affected have not far as small industries and cottage -taken to it kindly. I am told that industries are concerned, I regret to -trusts and gifts are the order of the say that during the last two years, -day. A lawyer who is also a MP. told they have suffered more than what me the other day, “I must thank you they have suffered during the last and Deshmukh, because for the last half a century. It is not necessary lour months I have been having a here to cut the thumb of an expert roaring practice. Not a day passes weaver: there are ways and ways of without somebody coming and con taxation. sulting me”. He said people came to liim to consult how to escape the Shri S. S. More: You can starve clutches of the Estate Duty Act. him now. 2239 General Budget 15 MARCH 1954 General Budget 2240 Siiri Gadgil: But how many thumbs treated with contempt, and if a have you? To continue my argument, foreigner goes there, he js welcomed. it is my tentative view,—and I do npt I want to ask the Government as to- say that I have come to any final how many functiOheries of the Gov conclusion,—that smaller industries ernment have given recommendatory are deliberately neglected and dis notes to foreign firms to engage their couraged. Most of the industries which friends and relatives. This is a matter had come into existence and had pros to be enquired into. One can easily pered during w ar time, are finis>hed. . see how things move on. After in Imports are allowed, on the ground ol dependence when we want to be self quality, of biscuits and chocolates. sufficient in matters of strategic im Smaller laboratories evolved certain portance and in certain matters here- colours and to a certain extent, the and there, something else is actually Government policy was to help them. happening. Nobody knows what is-^ There was ban on the import of happening. I want the Government ta^ certain colours, and after going tighten up the situation—not that, through the pioneering pangs of that they should have a public enquiry. 1 industry last year and this year, they am not against A, B or anybody else^. had some ray of hope of eaxning a but I honestly feel that in the coa- little. Suddenly, the Government policy text of the present uncertainty in the changes and those British and foreign world, we have not developed civilian firms, which were exporting those industries which can be switched over particular colours here, have come to war production in a short time. here and are thinking of a combine This was an aspect which some of us with private industrialists and Gov placed before the Planning Commis ernment is going to help them because sion, but it seems that no notice has Government wants bigger production, been taken of it Even now, it is not . although the requirement of the parti too late, although time is the essence cular colours is fully met by our own of the situation. This is a point toa industry. It is time that Government delicate to be spoken frankly and. looks a little more carefully. For freely on the floor of the House, but. example, take the tin plate industry. the hon. Finance Minister can just, Only yesterday I received a pamphlet read my mind, and every Member of by one B. K. Ghosh. It contains this the House also can do it. mformation. In 1947 the Government said, “No more licensing of companies So far as actual proposals about, that come into existence later on”. indirect taxation are concerned, I Then, 1949, 1950 and 1953, dates were know there is another occasion, when , changed because a certain British firm’ the Finance Bill comes, to raise this; wanted to expand its productions, the point, but now I just want to give an result is that the British firm is get indication. Take the soap factories. ting more quota than can be consum There are small factories which are- ed here, whereas Indian companies run by people here in the last two- are going to dogs. I can quote other years, but Lever Bros, are being given, examples, but the point I want to permission to erect a plant capacity make out is this. When we are out for of which tffis more than ^ a t India a planned economy, we do not engage needs, and if that plant is installed a private industrialist, whether Indian all other soap factories will have to- or otherwise, to manage the economy close down. This “India Limited” has in such a way that instead of solving been the bane of the country. the problem of unemployment, it wiU Pandit Thakur Das Bhargava (Gur- add to it. Foreign capital and foreign gaon): It wiU limit India! interesfe are more welcome here! I am told that in the Secretariat, if an Shri Gadgil: I remember that ix^i Indian merchant goes there, he is 1939—^you were with us—whem. 0 ^ ^ ? ^ 224^ 3241 [Shri GadgUl M r. Df®oty-Spcak«; The hon. Mem Gandhiji speciaUy asked me to move ^ r^sdlutfen, and it w as a ip»U- ber wi^'add^ documeiited boolt that was given to l<^)k at the Firiante M iid^. me, ^ moved the resolution. Butr 9iri G a ^ : This Member unnecei- tli^n we left the Assembly because of sarily wants to get up «very time ”^ r circumstaoEwes and the m atter was s ^ pr 6t«ct other. hot pursue. Today, I have no theorer or tical objection to foreiei capital but M r. Depttty-Speaker: All Members -what is happening is that tore 4^ here are hdti. Mertfeers. capitalists, either by themselves or in -dbnjunction with our own capitalists, Shri Gadgil: Regarding cloth. Gov are driving out the small industries ernment were getting -and creating a situation in which it is way of import duty on foreign cotton. highly necessary that we hold all the What is the reason tor giving it up. Icey positions but where w® may be Somebody ^ id it is only Rs. 4 crores. suddenly found to be funking. That E w n if it is Rs. 1,00,000, let me have :is a situation we should avoid. it 1 want to know how much of this fine cotton for the manufacture of fine Take the case of betel nut. This is ^ superfine doth used in the export the only luxury left in Bombay for of fine and superfine cloth. And what "the poor man. Apart from the religioiis have you done? Rs. 4 crores are ^sp^t of which my friend Shri l>esh- ^ugiht to be met not by adding excise inukh is well aware, I just calculated duty on the fine an small industries. But a man may have at least be oht dut^ ^ ^ or twp ppw^r looms. you must toe disjj^arity b^wew the rich and the 4 / ^ ^ wbftV [Shri V. G. Deshpande] no money, Rs. 250 crores are going to still remember that last year our late be spent and we are watcMng with Dr. Syama Prasad Mookerjee warned wonder this great experiment of our Finance Minister that he was not deficit financing. My own fear is that going to realise this Rs. 18 crores. this deficit financing may end in noth This year our Finance Minister comes ing. It may on the other hand result and says that the deficit is only oil in inflation. Our country has been account of Pakistan having failed to congratulated by many foreign coun pay Rs. 18 crores. With his unending tries for having checked inflation. But hope, he says that this year he is now our Finance Minister in his confident that by having talks with anxiety to give economic prices to representatives of Pakistan he will different industries and the agricul have Rs. 9 crores. I do not know what turists is trying this experiment I Pakistan is going to send us. The would not have complained even hon. Member, Mr. Gadgil also has against this deficit financing of Rs. 250 given some gentle hint. Responsible as crores. My main complaint is that this he is, he believes in giving gentle Budget is conceived in a spirit of conv hints! My complaint is that our Gov placence, without taking into con ernment has not taken any hint from sideration that this country is on the the events that are developing in the brink of a crisis. India has to take world. India may be a great country; into consideration the great dangers it may be claiming to be the cham lacing here. We have to take note of pion of world peace but we do live the fact that America has decided to in this 20th century and we have to give military aid to Pakistan. In the be realistic. My complaint is that this face of this, the country is experi Budget is inaccurate and unrealistic. menting in prohibition, thinking tof community projects and thinking in England is not a country which you terms of the Colombo Plan. We still can call a war-mongering country. find that our Finance Minister ex Those who have followed the British pects Rs. 48 crores of foreign aid. Budget must have seen what huge This very fact shows that he thinks defence programme they have pre •that the whole world politics will go pared. They have taken American aidr on as it is going on. With the self I think, to the extent of 120 million respect that we are at least showing, sterling in the new defence programme. on the face of it my feeling is that a When Britain with all its preparation time may come when it will be im and defence policy thinks that its possible for us either to receive this defence preparations have to be iiv- Rs. 48 crores or for them to donate creased, our Government, with deficit this Rs. 48 crores to us. In view of financing to the extent of Rs. 250' this, my complaint is that this Budget crores, has increased its defence ex has not taken into consideration the penditure by only Rs. 6 crores. Even danger that is confronting India. for building bungalows in Delhi they are going to spend more than four Another thing which I want’to men crores and for the defence of this vast tion, in passing, is that our Finance country they are thinking of increas Minister has infinite and unending ing their defence expenditure only by faith in the good intentions of Pakis six crores. My feeling is that the tan. We on this side have repeatedly defence expenditure is not to be spent said that we have no faith in Pakistan. for any material improvements in the Pakistan does not implement the defence preparations but on some agreements. Our Finance Minister in purchases for the Air Force. They are the first year put Rs. 9 crores to be going to spend this and our defence realised from Pakistan. The next year will remain where it was. I cannot h e put this figure at Rs. 18 crores. I blame t^e Finance Minister for the General Budget 2248 2247 General Budget 15 MARCH 1954 p osition in which the country is b ecause Russian influence is on them, placed; it is just a mirror of the , are these 7,o5o Muslims not under the. country’s administration and the influence of Pakistan whose interests Budget just reflects it. are positively inimical to this country? I want to ask this question. If you Our main defect has been the'^is- bring them and rehabilitate them in taken foreign policy of the Govern this country, w'ill not the security and ment which has landed us into the safety of the country be endangered? present trouble. My feeling is that had Our country is still not realising the the Prime Minister of this country not dangers that are ahead. followed the mad game of what they You are taking so much pains to call ‘d5Tiamic neutrality’, we would rehabilitate those people but what not have found ourselves in the have you done for the refugees? I present situation. We have unneces find that in this Bydget only Rs. 4 sarily involved ourselves in Korea, crores are going to be spent on this and even after burning our fingers in score. Rs. 250 crores are to be secured Korean affairs cur Prime Minister ' by deacit financing but there is no makes an appeal for cease-fire in arrangement for a protjer defence plan Indo-China, The French Parliament is nor is there any money for the discussing the great offer given by refugees. I want to ask, on what is all Pandit Nehru. This w*ay we are going this money being spent? This is the On solving all problems but our own way our country is going. On this problems; and we have landed our question I want to tell them that uiv selves in the present trouble. less they make a revolutionary change in their defence policy and unless they When we find that such a powerful give a call and mobilise the forces in country as America is giving military the country for the defence of the aid to Pakistan, the enemy is at our nation, I feel that India has no future. door and we are not still thinking in terms of war. If we talk of war, they In the first place, I must say that say w^e are war-mongers. These are our Goyemment has to change its delicate m atters and. ought not to be foreign policy fundamentally. We spoken frankly, but my reason for have seen the tragic results of our stating this matter frankly is that our ' dynamic nuetrality. Our Prime Minis Government is still following the blind ter said that if we say that it is bad game of appeasement of Pakistan. for Pakistan to accept aid from Yesterday, we had read that at Amrit America, why should it be good for sar 1,300 Muslims from Pakistan have us if we accept aid of America or come; a great reception was accorded any other country? I am not cham to them and they are to be followed pioning the cause of America. My by others. 7,000 persons are going to . feeling is this. We have been told come to Saharanpur. All of us know, that it will not be possible for us to our Prime Minister himself knows, receive or accept any aid from that the relations between Pakistan America. But you will have to accept and India are so strained but Muslims it from somebody—from the same who had migrated from India in 1947 party or the other—whether you have are to be allowed to come and colonize to go to the same person, or both and they are to be brought back to parties, for aid as Arjun and Duryo- their homes. I have nothing against dhan both went to Lord Krishna for these particular Muslims but we have accepting aid. Lord Krishna went to to take realities into consideration. If one party and his vast army went to you say that Russian influence is the other party. I do not know whe working on the Communists here, if ther you have to go to America in this our Congress Ministers bear eloquent manner or whether you should adopt testimony against the \^ommunists the sanatana line—^that is if Am erica 23 P.SJ3. 2250 15 MARCH 1954 General Budget 2249 General Budget tS hri V, G. Deshpande] have appointed local advisory com chooses to be our enemT, America’s mittees in which non-Congress mem enemy Russia—the enemy's enemy— bers are not given place. I t^^ve some should be our friend. In politics there glimpses of the way m which the is nothing like friend and foe. Today money is spent and 1 feel that all one mav be a friend, as we find that these Rs. 250 crores or whatever England first fought agamst the money is raised by deficit financing, combination of Germany and Russia should be invested so that if the and then made friendship with Russia. country is called upon to make even Today we may take ttie aid of Russia greater sacrifices it will be prepared. and tomorrow if we have great love and My co m p la in t is not that the propor affection for democracy, we may make tion of the defence expenditure is common cause again with the demo much larger but that no proper atten cratic nations. We cannot take any tion is being paid to defence. risk in this country. My feeling is that India has to make a decision and Therefore, the first thing that our unless you do. all your budgets will country will have to undertake is to be unrealistic. We are depending upon start war industries in this country. foreign aid and are thinking--our Much more than the starting of war Deputy Defence Minister or whatever industries, in my opinion, is that a his designation is, has said in «he proper call has to be given. I do not Council of States that we are now thinking-of having war industries want to embitter feelings, but Govern ment have to understand what section and that w e may begin manufartur- will stand by the Government and ing after four or five years. Perhaps what section they have to look to with war may be over by that time. There suspicion. That is what a realistic and fore, a decision has to be taken first prudent government has to do. Be and the sooner the decision is taken, yond giving this suggestion I would the better. not say anything more. I am not a believer either In com munism or in so-called democracy I The second thing I want to say is feel that both these blocs are out to this. Last time our Prime Minister establish their empires. Therefor^ I ridiculed my idea of giving compul do not advocate anybody’s cause. The sory military training to our young country’s cause, I advocate; I advocate men. He thought that would only the cause of India not on any abstract make their bodies better. It is not so. principle. Enlightened self-interest is Instead of making our spirit rise my guiding principle so far as the higher and higher and go to the sky, foreign policy is concerned. After that I would like that we should have able we should decide to have the defence bodied young men in our country and preparations of this country. give them military training. In addi tion to giving military training I would In this connection, I may make one say that they should be given some or tw o suggestions which should b e amount of training in guerilla wai^ followed by our country. The first fare because we have to prepare the thing that w e have to do in addition second line of defence in our country. to taking aid, is concentrating all our We cannot have money like America energy on starting defence industries. or England. We cannot spend crores We should not waste money on pro of rupees, nor can we afford to allow paganda. I know that this Five Year our country to become a slave. We Plar is being used for party propar must develop a war technique where ganda, as our hon. friend Mr. Kila- by with less expenditure we will be chand said. We have no control over able to utiUse our huge man-power the money. At least in the State which and defend the country. So that is the I represent. Madhya Bharat, they 2251 General Budget 15 MARCH 1954 General Budget 2252 second thing that has to be taken into great danger that is confronting the consideration by our Government. country. And unless the budget is framed keeping constantly in mind The third thing that our country that the country has to face certain has to take into consideration is that dangers, when the whole aspect of this war may take place on the issue Indian economy would be changed, I of Kashmir, And when this question think the days ahead are not bright. of Kashmir comes we have to make up our minds once for all. We have Shri Vela 3rndhan: Sir, I am very to take away all this question of happy to speak on the Budget and, plebiscite from the U.N.O. Up to this as you know, Sir, this is not the first lime when talks of negotiations were speech that I make on budgets in this going on between the two countries it Parliament. If I remember aright, this was understandable that Pandit Nehru is the fourth budget speech I am should have said “I stand by my com making in this Parliament. mitment”. But when Pakistan has S hri S. S. More: Budget speech? openly said that the taking of Ameri can aid may help to solve the Shri Velayndhaii: Yes. Kashmir problem.—that means that Shri S. S. More; A re you in charge they want to solve the Kashmir pro of the budget? blem by resort to arms,—then we must also accept the challenge and teU Shri Yelayiidhan: Speaking on the them that the people of Kashmir have budget. I think my friend Mr. More expressed their desire to accede to will be always thinking of the treasury India by means of a resolution in bench and to jump over it. But I must their Constituent Assembly, and now tell you frankly that I am not so after they have expressed their desire anxious. we withdraw the question from the Mr. Depaty-Speaker; Jump over it U.N. and go forward with the integra or into it? tion of Kashmir with India. The inte gration should be made full and com Shri Velayudhan: I must say jump plete. The present accession is still on it, Sir. When I speak on this Budget limited, and we should think of the I must express the feelings which I ways and means w-hereby the integra had about this Parliament as such. tion of Kashmir with India may be When I entered this Parliament it was complete my great satisfaction and hope that Unless these things are done my this Parliament would be the spokes feeling is that we are liot going to man of democracy in the country and see a great future. The hope was ex would reflect the will and desire of pressed here that the Estate Duty was the people. But after these five years being imposed for the purpose of of experience in this Parliament I implementing the Five Year Plan. But m ust h u m b ly submit that I have a the paltry sum which the Estate Duty kind of suffocating feeling when I come has given shows that that hope is not into the Parliament. It must of course being realised. be said here clearly that b y its self imposed rules and regulations the Shri T. T. Krishnamachari: People Parliament has practically curtailed refuse to diet its rights of discussion and free speech. This Parliament stood high as the Shri V. G. Deshpande. Up to now Central Legislature where you also. nothing has come and even in the Sir, were a member for a long time. next year they expect only a v er y Now this is the first time in India paltry sum. All these taxes and deficit that we have an independent Parlia financing are not going to benefit the ment, an independent democratic country, particularly in view of the institution which we are working. General Budget 2253 General Budget 15 MARCH 1954 2 2 5 4 [Shri Velaudhan] This is the place where we will iiave of the great injury done to democracy to grow democracy and develop demo and democratic rimning of the govern cratic institutions. But it is my dis ment by the administration, still thinks appointment and I feel that this of keeping the administration intact Parliament is not giving vent to those with the same personnel. It wants ideas and is not developing democracy only to change the papers, ink, tables and democratic institutions. I do not and chairs. The time has come for the know, I am in a confused mind when Government to realise that both the I think of the future of this country. Government and the administrative personnel it backs today will go with Mr. Deputy-Speaker: What does the a good government and democracy. It hon. Member suggest? is poor statesmanship for a ruling Shri Velayiidhan: I am suggesting party to safeguard the interests of the just now. Sir. administration against the interests of the state and also to the detriment of Shri S. S. More: He is confessing the ruling party itself. that he has a confused mind. Shri Velayudhan; Party government Then, coming to the Budget, I must and party leadership are the tools of tell you that I have very carefuUy running a parliamentary form of gone through the speech made by the democracy. The task of a majority Finance Minister. Of course, he has party leader is very responsible in a claimed that it is a developmental country like India where democracy budget. Therefore, the only progres is passing through an infant stage. A sive aspect of the budget now pre party leader, when elected, is not the sented by the Finance Minister is the sole authority of the party. The prac amount he has allotted to the Five tice that a party leader can choose Year Plan. I do not know much about anybody for his team, whether from the progress made by the Five Year the party or from outside, must be Plan and the various schemes under used only in exceptional cases and on that. Of course, the long-term schemes emergent occasions. The majority in are there and they have worked very the majority party must have a psy weU. But, I m ust tell you th at it has chological satisfaction in the choice of not benefited the common man who the team for the cabinet by its leader. wants immediate succour and relief. In fact in India, in the States and There is great unrest in the country at the Centre, the party leaders who as a whole, not only among the poor formed the cabinets were satisfied people, but also among the middle with choosing the inferior cadre in the class and the upper middle class. It is because the Five Year Plan has cabinets and leaving the best men of the party as back benchers. This completely failed to react to the practice is dangerous to the healthy people’s psychology as a whole. Cer tain aspects of the Five Year Plan growth of democracy. were talked about in my State during Then regarding the administration I the recent elections there. There was wish to express some of my feelings. a lot of propaganda literature publish The administration is the field where ed by the Government as well as the democracy has to develop as a machir various parties themselves regarding nery for the welfare of the people. the Five Year Plan. I read some of But the Government of India failed this literature and it was a surprise to face the task of converting it in to me that all the schemes now this direction. AU the measures taken worked on the Five Year Plan basis by the Government to change the in my State were included in the plan climate of bureaucratic administration that was Initiated just after the war* have failed. The Government, In spite by a committee appointed in the Gemral Budget 2255 General Budget 15 MABCH 1954 2256 Travancore-Cochin State called the must say that the future of India is Post-War Reconstruction Committee dependent on my State. I am not say There was not a single item added to ing indirectly that I am afraid of com it in the working of the Five Year munism. I am not afraid of any other Plan. Therefore, the Five Year Plan form of Government. I must say that now taken as a whole, is not a new I want a revolution, a peaceful revolu thing, excepting perhaps the social tion to take place in India. I am not services scheme which is now work afraid of a violent revolution, and if ing through the community projects a violent revolution alone can change and also the various schemes spon things in India, I am prepared to face sored by the Government. it and sacrifice m y life. Millions in India are illiterate. They are poor and are starving. If things are going ta I will have to speak a few words continue as they are today, I am sure regarding my State which is now they will end in a civil war.. It is the coming out with a critical situation. responsibility of the Congress Govern You all know that it is now being ment in power to see that this crisis talked of not only in the Capital of is avoided and see that a perfect demo India, but in the whole world, about cratic set-up is established in all the the future of Travancore-Cochin State States and at the Centre. in relation to India as a whole. I am very happy to say that the Travancore- Sir, another thing that I want to say Cochin people have expressed their is about the Scheduled Caste Commu« will in the last election. It is a great nity, which I represent here. I am the thing that the people worked in the only Member from the Travancore- most democratic way in the recent Cochin State representing about twelve election that we had. I must say that lakhs of people. Therefore, I must I am very proud of the people of tell you that X have a responsibility Travancore. I myself was bom and towards that community which has brought up on the soil which has now remained backward for centuries. I created history for the first time in am happy to say that for the last five India. At the same time, it is not only or six years the Scheduled Caste my duty to say ‘yes’ to what has people in India have developed politi happened, but also to see what next cal as well as social consciousness, so should be done. I have my great fear that they are now standing on their about the ^ future, not only of own legs not only in this Parliament, Travancore-Cochin State but of the but in all the States and in the various whole of India considering the way in fields of life in the country. But that which India is going today. We are is not enough. About seven crores not only in a political crisis, but also of people are suffering in one way or in a psychological crisis. It was left other having some sort of social dis to the responsibility of the Congress a b ility in the name of caste system. Government, who had inherited the T here is a kind of slavery w hich exists administration from the British Gov today between the Scheduled Castes ernment, to see that this crisis was and the upper class. There is no need eliminated to the satisfaction of the of any patch-work or half-hearted majority people of India. I must tell measure. Unless and until we wipe you that the Congress could not away caste system completely, I do not satisfy the aspirations of the people think India can develop itself into a of this country even though they have perfect democracy. Sometimes I have remained in power for about six analysed the various political, econo years. It is a matter to be laughed at mic and social problems coming up in or criticised. Great changes are taking this country and I have finally come place in the minds of the people about to the conclusion that unless and until inany of the Members who are now we wipe out caste system, there is no n^urmuring may not be aware of. I future for democracy in the country. 2257 General Budget 15 MARCH 1954 General Budget 223S [Shri Velayudhan]i This is what Mahatma Gandhi said He has also imposed a tax on art some years ago; he said not only once sUk. Of course, India is a poor coun but on several occasions, that it India try and so cannot afford to put on is to survive she will have to abolish real silk; the women and children caste. But, we have not yet gone to wear only art silk. 1 do not know that extent. We have not yet taken what the women will feel when a tax courage to see that caste is wiped out is levied on art silk. We can see from India, plenty of art silk—not only in the Delhi shops but everywhere. I know that not only the people of South With regard to the few measures India, but also the people in North that the Finance Minister has brought India, especially the Punjabi ladies forth in the Budget relating to taxa are fond of wearing art silk. Mills in tion, I have to say that most of the Ludhiana and other places produce art present taxes are hitting the common silk. It is a great hit on the comforts man to which class I belong. During and convenience as well as the taste the last election there was an interest of the people when you are taxing art ing point that was raised among the silk also. various party leaders regarding cer The Finance Minister has gone still tain measures that are now being further and he has imposed a tax on taken up by the Gk)vernment of India. betel nuts. Of course, there is a certain Take for example, family planning. I section of the people in my own conr could hear some of the speakers say stituency, who are mostly arecanut ing from platforms that the Congress agriculturists. They have welcomed Government will not even allow this measure. 'I also join them in wel women to beget children. That was coming this measure. But. at the same the type of propaganda that was being time. I must tell you that the taxation staged in the last election campaign is a little high. It could have been because of the family planning 50 per cent, or something like that, scheme. It will have a very great effect less than what it is, on the minds of the people who are sentimental against family planning India is facing a great crisis not or birth control. Now the Finance only in the economic sphere, but also Minister is adding insult to injury. in the political sphere. How are we Soap, chappal, betel are all things to going to face it? We must have an benefit the poor man and the Finance ideology. The other day, my hon. Minister is going to tax all these friend Shri H. N. Mukerjee was goods. I do not think that even one' speaking on the Press (Objectionable per cent, of the people in India are Matter) Bill and he put certain things using shoes or chappal. When we go to the Government. He said because of to Western countries, any country out lack of ideology aU these diflftculties side India, we cannot see a single have come. I also said the same thing. man or woman walking along the Any political party cannot stand the road without chappal or shoe. I do test of time unless it has a definite know whether the Finance Minister ideology. has measured the weight of the criti cism that would be levelled against An Hon. Member: Idiocy. this measure in this House or outside. Il9 has imposed a tax on chappals sairi Velayudhan: Yes; I agree; I and shoes which are absolutely neces Join with you. I must t»U you.,.. sary not only for the health of the people, but also for the comfort and Mr. Deputy-Speaker: Whatever the convenience of the peopl# . of this hon. Member says, by way of retort, country. is cast on me. 2259 General Budget 15 MARCH 1954 General Budget 2260 Sardar Hukam Singh (Kapurthala- admiration and respect from other Bhatinda): He tells you all right; but countries of the world also. he is addressing this side. We have given, I should say, general concurrence to the sentiments expres Shri Velayudhan: What is happen sed in that statement. It is too much ing in this world today, adds to the for an hon. Member of this House to tensions. There is no meaning in say advocate receipt of aid from any ing that we are going to have a ‘third source irrespective of the countries area’ built in this world. When there from which the aid originates. is an international ideology, we loo must have an international ideology to The reactions to this Budget have counteract. I stand for democracy in been of a varied nature. While a sec India not because it is a fad today, tion has received it as a bold, develop but because it will effect a peaceful ment Budget, a diametrically opposite social revolution in the country that view has been expressed, namely, was envisaged by our forefathers: I that it is a disappointing and dis mean the Father of the Nation. I tressing Budget. In between these stand for that. I hope that real econo two opposing views, there have been mic and national guidance will be couched in abusive epithets also. I given by him and by the Cabinet as do not propose to classify them and a whole in the near future. examine the Budget analysing each aspect. Shri A. M. Thomas (Ernakulam); I It has been said that the Budget am glad to follow Shri Velayudhan does not contain many pleasant sur who has heralded Travancore-Cochin prises. But, the charge that it is not into the discussion of the Budget. heartening and does not instil enthu siasm is absolutely unjustified. We The Budget that has been introduced are not justified in expecting fresh by the hon. Finance Minister has been thrills from the annual financial state generally welcomed by the first three ment. We have taken in hand the im speakers though Shri Gadgil has wel plementation of the Five Year Plan comed it with a certain reservation. as finally approved, with suitable Shri V. G. Deshpande has referred to modifications as circimistances com the Defence aspect of the Budget. I pelled us to adopt. Each year’s budge* think it will bear repetition to say is therefore wedded to the Plan and that out of the total expenditure of the Plan is the touch-stone for the Rs. 467*9 crores, Rs. 205 62 crores will Budget. Examined in this context, it be on Defence services. I think this is a development budget in the full is a substantial amount that we can sense of the term. It is heartening in bear. The inherent stability or strength the sense that it reflects the Finance of a State lies in its economic stabiMty Minister’s firm determination to achieve and strength. I do not join with my the targets laid down In the Plan friend in advocating a race for arma within the period of the Plan itself ments for a country of the nature of whatever be the difficulties. The Plan, India. I am ashamed to see an hon. as has been stated in more than one Member of this House advocating arms journal or newspaper, is not to be aid from whichever State it may be allowed to fall into arrears. It may forthcoming, whether from America or be that the expenditure in the first Russia. I do not know which section half period of the Plan has not been of the people of India the hon. Mem of the order as originally decided upon. ber represents, when he advocates Development expenditure is the key that. The hon. Prime Minister’s &tate»- note of the present Budget. I am very ment made a few days ago in this glad that the Finance Minister views House has been welcomed by the with some concern the shortfall in the people of India and it has elicited development expenditure in the first 15 MARCH 1954 Commonwealth Finance 2262 2261 General Budget Ministers' Sydney C onference [Shri A. M. Thomas] standing as a hindrance to the utili»a- hall of the period ol the Plan. U is tion of the resources. It is total^ somewhat smaller than the propor absurd that financial sanction should tionate outlay, we can understand be withheld for months after adminis that But the rate of progress has trative decisions are taken. In this been rather disappointing. We have connection. 1 would advocate a policy faid our full faith in the Pla- of decentralisation in the administra where, in important tive set-up. been a shortfall. Some have pointed out by the hon. Fmance In the first Progress Report of the Sinister himself. W e had expect^ Planning Commission, on page 141 it much from the community develop has been said that “in addition to the ment projects. They have not pven work which the Bharat Sevak Samaj ^ appreciable results. It U a m atter o or other voluntary organisations and regret that the provision for local groups can undertake over a long works has not been exhausted. There period, it is of the highest importance have been lapses in the p r o v i s i o n tor that the village panchayats and other local self-governing bodies at different basic and social education. U n t e s there is prompt utilisation of the levels should become fully responsible Bud^t provisions and a bold « in the matter of organising develop followed in that respect, we not ment programmes in their respective be told of the logical results of that. fields for seeking the maximum local co-operation and participation”. The Industrial housing scheme of 5 P.M. the Central Government is a nrst Iss^enture. But, has there been any We were assured that a substantial portion of the amount which is to be expansion of industrial housing. I spent under the Five Year Plan will can very weU understand a slow pro- be spent through local panchayats. In c tL in the expansion of tiie scheme my State, for example.... •where the co-operation of the indus trial employees comes in. What abou Mr. Deputy-Spe^er: The hon. Mem that section wherein 50 per c e n t, is ber may stop at this stage. The given by way of subsidy to and the House has to proceed to some other other 50 per cent, is given by way of business. He may continue tomorrow. loans to the States? My information is that papers pass betw^n thejwo COMMONWEALTH FINANCE Governm ents, namely the Central MINISTERS’ SYDNEY CONFERENCE Government and the State ments, and either sanction is not given Mr. Deputy-Speaker. Now, the House or the grant is not made. In these will take up discussion of the Com matters, we have to take into account monwealth Finance Ministers’ Con the local conditions and problems. The ference, held at Sydney. State Governments should iltelled Two hours are allotted for thds, from Ireer hand in drawing up the detari^ 5 to 7 o’clock. I understand the hon. specifications and puttin* them ^ Finance Minister may take between {■fleet. I am one with my hon. friend 25 and 30 minutes. There are as many Shri Tulsidas when he says that the as eight hon. Members who want to expenditure must be properly supe^ participate in the discussion besides vised. At the same time 1 would sub Dr. Lanka Sundaram who has given mit that for the sanctioning ol any notice of the motion and Mr. Guru- amount or for making aw grant a padaswamy who has supported it. In m«Ee liberal policy must be followed all there axe ten. I will allow 15 to 20 bj the Centre and the main emphasis minutes to the hon. Member who is S o u ld be o u the principle of not 2263 Commonwealth 15 MARCH 1954 Finance Ministers* Sydney 2264 Conference the opener of this debate. So, 50 Mr. Deputy-Speaker: I cannot help minutes are over. An hour and ten it. The opener will have some more minutes are left. I will try to distri time than the other two. bute the time over the Members who Shri S. S. More (Sholapur): There have given notice under the rules. are three sponsors like three Muske They will get five to ten minutes each. teers for the proposition. Who is the At the end of five minutes I will ring leader of the trio? the bell. Mr. Deputy-Speaker: Why did they Shri K. K« Basu (Diamond Harbour): allow the first name to be put in It is better to drop out some of the favour of somebody? speakers. Pandit Munishwar Dait Upadhyay Shri Bansal (JhajjaD-Rewari): May (Pratapgarh Distt.—East); May I know I suggest that this is a very important whether the time for the Budget dis subject? In fact, in the House of cussion will be extended by these two Commons a full-dress debate was hours? raised on this subject. This should not be disposed of within a matter of two Mr. Deputy-Speaker: Wait until the hours. I think the House will be wil Speaker comes tomorrow and then ask ling to sit even longer. If not, some him. ' other day may be allotted. At least two more hours should be given for Dr. Lanka Sandaram (Visakhapat- discussion of this subject. nam): Before I make my submissions to this House on the Sydney Confer Mr. Deputy-Speaker: I have nothing ence, I would like to lodge my empha to do with the extension of time. I tic protest against the manner in was personally feeling whether such which Government is denying to this matters ought to be allowed to inter House access to, information on ques rupt the Budget proceedings. I am in tions involved in a conference of this favour of giving time for such discus character. sions, but there is no meaning in The House would recall that in the introducing such matters as this, how House of Commons on the 3rd Feb ever important they might be, during ruary last this very same question was Budget discussions. A number of hon. discussed on a Motion for Adjourn Members have sent me chits. Many ment. Such was the assessment of of them have not taken part in the England of the importance of the debate on the President’s Address. decisions taken at Sydney. Many have not had an opportunity to speak on the Railway Budget. If even I have put myself in correspondence this opportunity is denied to them, they with my hon. friends, the Finance need not go back to their constituen Minister and the Minister for Parlia cies at all! That is what is happening. mentary Affairs, asking for data to be circulated to us, in fact for the issu Of course, I am not going to extend ance of a White Paper even weeks the time. The time allotted Is two ago, and what do we get?—^the com hours. It must be finished within that munique from Sydney dated the 15th time. I will try to allot the time as January, a brief statement of less fairly as possible among those Mem than three pages made by the Finance bers who have given notice. * Minister on the 18th of last month in this House, and yesterday morning— Shri M. S. Garupadaswam y (My I would like you to mark the words— sore): Three of us have raised this only yesterday morning, something discussion. So, I submit the time given purporting to be a paper done by the to all the three may be equal, so that Economic Affairs Department of the sufficient time may be available to us. Ministry of Finance, rehashing mostly 2265 Commontvealth 15 MARCH 1954 Finance Ministers* Sydney 2266 Conference [Dr. Lanka Sundaram] . journment Motion in the House what the Finance Minister told this of Commons on the 3rd Feb House on the 18th February, with only ruary - on this Conference. Mr. half a page of statistics added, were Butler said; “I may say with made available to us. out betraying any secrets that one You would also recall that when or two of those present, including the my hon. friend the Finance Minister Prime Minister of Australia and the made the statement in this House on Indian Finance Minister, two great the 18th February, my hon. friend students of EngUsh, did their best to Mr. Bansal promptly stood up and improve the language of the com said that only four days after the issue munique”. I have for the first time of the Sydney communique, a treaty come across a reference to my hon. was signed—a trade agreement—bet friend the Finance Minister becoming ween the United Kingdom and Japan something like a janitor for Her on the 19th January, and he wanted Majesty the Queen’s English. But look information. Even that information is at what the London Economist w rote not vouchsafed to this House. I re^ about the communique, as well as gret to say that this is not the manner w hat the Financial Times of London in which this House should be dealt wrote about this communique, both as with by the Government, and I would regards language and content. I am ask my hon. friend the Finance Mini^ quoting the London Economist. It ter to please remember that this is Parliament, and not the office of a “A jumble of careful contradic .district official or a bank. tions, in eight pages of double talk In the notes circulated to this House- and bad grammar.” by the Economic Affairs Department The House would mark the words of the Ministry, the following sentence “careful contradictions”. occurs: “The detailed discussions at the conference are treated as confiden The Financial Times says on this communique from Sydney as follows, tial'’. And small wondfer that the infor mation made available to this House I am quoting: by the Finance Minister is most meagre, “The Sydney conference has even though the questions involved in provided something of a record m the discussions at Sydney touched the production of garbled reports. upon such a wide variety of important If the final communique runs true subjects like international trade, to form, it is not likely to clear balance of payments, convertibiUty, up the confusion very much.” commodity exchanges, wages and employment and a host of other ques This is the reason why, I am sure, that in all the statements so far made, tions. ^ not only in this country by my hon. In fact, I was tistonished at the friend the Finance Minister, but also language and the meaning of the com by his colleagues in various countries munique issued from Sydney on *the in the Commonwealth, there is an 15th January this year. I have no attempt to deny information to the desire to indulge in what might be countries concerned. I will deal with termed the gentle art of debunking, that m some detail a little later on. what may be called Deshmukh Finance, but I would like to quote to this House I will direct the attention of the the very high tribute paid to my hon. House to the preamble of the com frijend the Finance Minister by no munique from Sydney of the 15th less a person than the Chancellor of January issued in the name of the the Exchequer, Mr. Butler, in the United Kingdom including its colonial course of the discussion on the Ad territories, Canada, Australia, South 2267 Commonwealth 15 MARCH 1954 Finarice Ministers' Sydney 226R Conference Africa, New Zealand. India, Pakistan, Its surplus by mid-1952-53 was Ceylon, and the new Federation of over £400 million.” Rhodesia and Nyasaland. The pre And then he said “Not a bad achieve amble of the communique in part runs ment”. Immediately in the debate as follows I am quoting; Mr. Hugh Gaitskell, former Chancel “We have been informed of the lor of the Exchequer, to whom I will discussions between the United make a reference again in a few Kingdom, representing us -----” minutes time, asked Mr. Butler whether this sum of £400 million sur —I would like the House to mark the plus was not just only £257 million, words '‘representing us” meaning aU and whether it did not include defence the coimtries— aid of the order of £118 million, be “....and the Western European sides £45 million as “other capital nations and the United States of grants for movements into the Sterlr America. The relevant facts have ing area”, with the result that the been faced, and future trends surplus was only of the order of £94 estimated.” million and not £400 million. As I ^ said at the outset, lack of information, The House would not fail to note the and denial of access to information power of attorney given by India to are at the bottom of all this trouble. the United Kingdom to conduct nego This House does not know, and this tiations with the Western European country does not know what exactly countries and the United States of these figures are, and what the impli America. I would ask my hon. friend, cations of these figures are. the Finance Minister, to tell us in this debate what exactly these facts are, I shall now quote from page nine what the estimated trends will be. of the Reserve Bank Bulletin fo r January 1954, the latest available to Shri Deshmukh on the 18th February me so far, to carry the story forward. when making a statement in this It says: House said in part as follows: “Preliminary compilations of “The action taken in the pre India’s balance of payments posi vious years had enabled it to over tion show that during the quarter come the crisis in its central July-Sept^mbe^ 1953, there was a reserves of gold and dollars and a small surplus of Rs. 0-2 crores on continuous deficit had been turned current account, compared with into a moderate surplus during the deficit of Rs. 10 4 crores for 1953.” the quarter April-June 1953. This improvement of Rs. 10-6 crores This statement was made before the was, however, achieved at a re House to lull this country into a sense duced level of trade.” of security as to the manner in which This, if I am not mistaken, is the our external finances are being hand balance-sheet of our foreign trade in led by the Government. But let us recent months. I have got here built examine the record. And here I am up a complete analysis of the balance quoting no less a person—I repeat of trade figures, and even though I again—than Mr. Butler. Chancellor of concede that during September- the Exchequer in England, who on the October 1953, there was improvement, 3rd February in the debate in the most of the months in the preceding House of Commons said as ioilows. I year were deficit, and the years 1§52- am quoting again the Hansard: 53, 1951-52, and even earlier years “Taking the reserves at the first were entirely and heavily deficit point, the Sterling area deficit in I have attempted to examine as 1951-52 amounted to £1.000 milHon. much as possible the statistical table Commonwealth 15 MARCH 1954 Finance Ministers^ Sydney 2270 2269 Conference [Dr, Lanka Sundaram] attached to the note circulated to us Finance Minister has in the current in the name of the Ministry of Finance, Budget, abolished to a symbolical and here is the result. For the twelve- extent, imperial preferences, especiaUy half-yearly periods from 30th June with respect to the import of motor 1948 to 31st December 1953, our conr vehicles of certain categories. But tributions to the central reserve pool^ look at the implications of the comr -of gold and dollar of the sterling area munique and what Mr. Butler said in were six times plus and six times the House of Commons, and what we minus, i.e., for six half-year i>eriods, it are doing here. v/as minus, and for six half-years, it In the highfalutin language of the was plus. The actual contributions Sydney communique, they speak of w ere $190 million, and w ithdrawals ‘great, though intangible matters’ in $412 million; in other words, our net the following language: withdrawals were to the tune of $222 million. My hon. friend, the Finance “For, we >have faith in ourselves, Minister, there seems to be an im and in our future, and in our provement in the dollar access to enduring company, one with an India, as a result of the ministrations other....The underlying element of ^f the finances of the country, which thought and feeling at our meet he has made with the past four ing has been our deep and united "budgets. faith that the strength of our Commonwealth is the strength of Without taking much time of the freedom; that the freer exchange House. I would like ta direct its atten of currencies and trade can be tion to two very important questions, best assisted by the strength of Involved in the Sydney communique, our own currency and the expan relating to the decisions of the Com sion of our own trade and com monwealth Finance Ministers* Confer merce.... We avow ourselves, and ence. My regret is that in all the the nations which it is our honour documents circulated or made avail to represent, the friends of peace, able to this House, there is not a the advocates of peaceful trade, single mention of the words ‘imperial the apostles of understanding.” preference’. In the light of what is happening now, as regards the conflict The communique includes, of course, between Canada, which is a member my hon. friend the Finance Minister 'of the Commonwealtb and still belongs among the apostles. And what does to the dollar area, and ih% rest of the one such apostle, Mr. Butler say in Commonwealth, I would rather wel the House of Commons? I crave the come the creation of a rupee area, the indulgence of the House to quote four freeing of the rupee from the thraldom pointed statements from the speech he of sterling, in view, in any case, of made to the House of Commons on the fact that the sterling area is break 3rd February 1954. They are as ing up, even as Mr. Gordon Walker follows: , wrote in one of the local papers today. (i) “....it is the United King Here, I would like to make two pro dom, which through all this diffi positions. I regret that my hon. friend cult period, kept an open door for the Minister of Commerce and Indus all imports from the sterling try, Shri T. T. Krishnamachari, who area...” promised to place before the House the conclusions of his investigation into [Dr. Lanka Sundaram] ^ the 27th February, a number of Mr. Butler stated in the House of things happened resulting in the Commons as follows: declaration by my hon. friend, the “I was able to discuss the matter Finance Minister on deficit financing with their excellent Finance of the order of Rs. 250 crores for this Minister, Mr. Chintaman Desh- year. Later, Sir, my friend said in mukh, and I thought that a most the other place that during the coming remarkable factor about India’s two years, it might be anything economy was that she has curbed between Rs. 500 and Rs. 600 crores. inflation.” With the result that the question must be posed—and I am sure my hon. It was a very fine compliment, and iriend would not burke it—as to how I am happy that our Finance Minister he proposes to curb inflation with this gets this compliment by the Chancellor enormous pumping of fiat money, of the Exchequer in England. with his pilgrimage, which is long, remorseless, but deliberately under But, Sir, what iiappened between taken, to the Nasik Printing Press. 3rd February*, when Mr. Butler made Because, as far as I can - understand this statement, and the 27th February, the documentation of the Sydney Con -when my hon. friend, the Finance ference, curbing inflation and putting Minister, presented the budget to this the economy of each unit of the Com House? monwealth on an even keel are the primary criteria for the continuance Shri Bansal: Was there any other of the Commonwealth as a sterling statement on 3rd February? I thought it was on the 4th. bloc. Mr. Butler also said—and this to Dr. Lanka Stindaram: 4th was the my mind is most important for this 'date of record of the Hansard. The evening’s debate— debate was on the 3rd. My hon. friend, Mr. Bansal, should know ttiat the date “Moreover she (India) is actually follows the debate. ' not utilising her usable, available sterling balances even for the pur Shri Bansal: I am learning from you pose of development. If she needs now. reserves for developmental pur Dr. Lanka Sundaram: It is there for poses, I do not anticipate that you to see. she will have to go necessarily to the markets, for she has these Mr. Deputy-Speaker: One minute is reserves there. There, again, is an ' lost in this way. other country which has taken Dr. Lanka Sundaram: I am sorry, most strict measures.” Sir. In the House of Commons, the A great tribute to our Finance publication carries the date following Minister—that he has taken strict the date of debate- It is a small issue. measures to keep within the limits. I would conclude now and I would But the point is, how does he pro cxave your indulgence only for three* pose to get money, with the Randall more minutes. I was quoting just now Commission report completely clear, Mr. Butler about the remarkable with every possible declaration which factor concerning India’s recovery by is now coming from the U.S.A. stating curbing inflation. I was saying that that no more economic aid would be between the 3rd February when given by U.S.A. to any country, in Mr. Butler made this statement giving cluding India, as a matter of their global strategy, or the lack of it? We this high tribute to Mr. Deshmukh and ♦Corrected as “4th February" by the Member at later stage. 2275 Commonwealth 15 MARCH 1954 Finance Ministers* Sydney 2276 Conference h ave already used more than a India alone has devalued to the fullest thousand crores of rupees of our sterl extent to which devaluation was done ing balances which were there at the by Britain. Pakistan has not devalued. time of partition. Now we have got Canada has not devalued to the extent somewhere about Rs. 723 crores, today, to which India has devalued, nor for and this is anticipated to be taken into that matter Ceylon. I repeat again in account. In fact, my hon. friend, the the words of a former Chancellor of Finance Minister, said so in his budget the Exchequer, Mr. Gaitskell. that the speech. But the point to which I am sterling area is cracking up. directing the attention of the House Sir, you would recall that each one is, how do we propose to go about in of us in our early days, student days, terms of the grandiloquent statements has come across a publication styled made at Sydney, in that communique, something like "‘Benefits of British in regard to economic assistance for Rule in India”, which each one of internal development of the Common us was compelled to get by heart in wealth in the light of this statement those days. I trust that my hon. friend of Mr. Butler? would not consider me to be indulg Sir, last year, £120 million were ing in levity if I ask him to bring released in Britain for economic assist out a similar document on the bene ance to the various countries of the fits of India’s membership of the Commonwealth, including India. I Commonwealth in the commercial would like to have figures from my sphere. hon. friend as to how much this My final complaint against the country has got out of that amount. Finance Minister—and I say it with a Mr. Butler said ‘a variety of sources sense of responsibility—is that this in the City of London for these pur House is entitled to information and* poses’ will be available. That is a very that information is not made available. important issue, and I want the Even the figures announced by Finance Minister to tell us about the Mr. Butler were contested in the House manner in v/hich, in the light of the of Commons on the 3rd February about growing drying up of American or these accruing dollar reserves by other foreign assistance, Britain, Mr. Gaitskell, and Mr. Butler could according to the declaration made at not rebut him in argument. Sydney, is going to release funds out side our own sterling balances. This, Sir, is my case, and I have raised this discussion in this House Sir, Mr. Gaitskell, a former Chan in order to enable this country to get cellor of the Exchequer, with whom the actual facts about the benefits my hon. friend has negotiated a sterl that we are receiving as a result of ing settlement a few years ago, hap our membership of the sterling area pens to have arrived in New Delhi and the Commonwealth. yesterday, and I do not think I am doing him an injustice by quoting from SmI Bansal rose — a report of a special interview he has Mr. Deputy-Speaker: I find that some given which has appeared in the of the hon. Members who have given Times of India this morning. He said: notice that they would like to partici “As a former Chancellor of the pate in the discussion do not appear Exchequer, I was not particularly to be in their seats here, so much so satisfied with its working— i.e., the I shall allow some more time to other working of the sterling area.” hon. Members who wish to participate. I want my friend. Mr. Deshmukh, to Shri M. S. Gunipadaswamy: Sir, the tell us how exactly he reacts to this. previous speaker said that this House The sum total of the events so far is is entitled to know the full informa that the sterling area is cracking up. tion regarding the Sydney Conference. 2277 Commonwealth 15 MARCH 1954 Finance Ministers^ Sydney 227$ Conference [Shri M. S. Gurupadasw am y] I agree with this view. This House port has dwindled, export has also being a sovereign Assembly is entitled dwindled when compared , with last to full information. Unfortunately, the year. So the balance of payments posi Finance Minister is treating this body tron is improved because there is a with contempt. The communique that sort of austerity, restraint, restriction has been released at Sydney is very imposed upon foreign trade. So, there scrappy and conventional and contains is not much foreign trade this year little information, and we cannot and there is not much progress. We arrive at any decision. Sir, this is a cannot say that it is in any way an very important matter which con- advancement on the previous year. cems our economic and foreign trade policy and so this sovereign body is The Finance Minister, in the course entitled to know all the facts. of his peech, said that we will utilise our surplus reserve to purchase rupee Unfortunately, some of the things are coin from the International Monetary not given to us on the ground that Fund to avoid payment of interest, they are confidential. Sir, the Finance and he also said that he may pay Minister, if he wants to carry the back debts to Pakistan. In this con House with him, must create con nection, I want to submit, when we fidence in us. We must have con are in need of huge sums of money, fidence in him. Unless we have trust of great resources for our develop and faith in him, it is very difficult mental projects, it is not at all wise to support his policies or support his to use our external resources for pay decisions. ment of debt or purchase of rupee coin. These things can wait. We can [P a n d it T h ak ur D a s B hargava use this surplus more profitably for in the Chair] our developmental expenditure. Why Now, the Sydney Conference has met should we have external aid when we and dispersed. It has become an annual have am.ple sterling resources? Why show of the Finance Ministers of the not use them for developmental pur Commonwealth; Finance Ministers poses; where is the overriding neces from various countries of the Com sity to earmark this surplus for pur monwealth meet, talk to each other, chasing rupee coin? discuss problems and disperse, issuing There is another point. If the a very vague and general communique. Finance Minister does not utilise this Sir, this communique is very badly surplus for financing developmental worded and it contains little informar expenditure here. I can very well ask tion. If I may be allowed to say so, I him—it may look a little fantastic— feel that most of the communique is to invest that amount in some foreign a pitiful jumble of incoherent non business which may be more profit sense. able than tihe projects here. At Sydney the Finance Ministers There is yet another important pror- have discussed the problems of balance blem connected with foreign trade. Of payments. That has appeared in all Here, I want to say that we are bound the papers. That is an important pro hand and foot to the Anglo-American blem. Regarding this Question, our bloc. It is very tragic. Now, the bulk position is not so happy. The Finance of our foreign trade is with the U.K. Minister said in his Budget speech and U.S.A. that the balance of payments position An Hon. Member: No, no. this year is slightly better. But at what price? The balance of pajmaents Sfari M. S. Gurupadaswamy: Unless position is improved because there has we are completely free from this been reduction of foreign trade. Im bondage, we cannot call ourselves Commonwealth 15 MARCH 1954 Finance Ministers* Sydney 2280 2279 Conference independent and we cannot follow our days having more attachment to the own independent economic poUcy. so-called free world which are repre What has happened in Sydney? We sented by the West European countries hear that they discussed about GATT. and America. Unfortunately, we have Some of the counti*ie^ did not agree not' promoted same relation with for doing away with imperial prefer Eastern Europe and China and other ences. Particularly, Australia and New countries. They are not at all parti Zealand laid emphasis, we hear, on cipating in our conferences. It is unr having imperial preferences, and fortunate that we call ourselves inter Canada and India disagreed. But, national, we call ourselves neutral and what happened? We do not know claim that we are friendly to all whether they have taken any detjision nations and we are not acting accord in the matter and whether they are go ingly. At least economically, let us ing to continue imperial preferences or follow a truly international policy. not. We do not know whether the But our policy is. unfortunately, structure of our trade will remain altogether one-sided: we are com as it is and whether it will always be pletely tied hand and foot, have be linked up with the Anglo-American come almost slaves to the economic countries. We know nothing about this domination of the Anglo-American m atter. powers. Especially America has in creasingly entrenched herself in our There is another matter which is foreign trade. That is painful to all of equally important and that is about us. Hereafter at least. I expect the U.S. policy with regard to sterling Finance Minister to be more bold and countries. It is not a very happy one. courageous and would view the pro America is not willing to change its blems from a different angle. He must foreign trade policy; it does not want be a little less rigid and orthodox in to bring down tariff walls. It does not his views. He should change the old want imports from sterling areas. On ways and methods. Finally we want the other hand, it wants to promote that these Conferences should not be exports. Recently, the Randall Com come a joke or a farce. mittee has been set up. It is not cer tain whether this Committee will be Mr. Chairman: This is the fifth time helpful in easing the tension. that I am ringing the bell. I expect I doubt very much whether the the hon. Members will not force me to dollar problem will be solved by ring the bell so many times. Now, the Commonwealth countries. It is not six or seven Members are to take part possible for them to solve the pro in the debate. I would request them blem. It can be solved only by to be kindly indulgent to me and not America; but, America is not prepared force me to ring the bell more than to solve it because it is not in its own twice. interest. If it solves the dollar pro Shri Bansal: Sir. I must say that blem, if it creates facilities for the House would be thankful to Dr. Lanka expansion of trade, if it promotes world Sundaram for initiating this debate trade, then American domination wiH and for towing a very fine undeiv. come to a close. There will no longer standing of all the problems that were be the financial colonisation of the involved in this Sydney Conference, world by America. That is the fear even though his reading of fbe Hanm that is working in the minds of big, sard may not be as perfect as lWbiild giant combines of American businfess have expected it to be. The debate and they do not allow America to was held on the 4th; he can take it follow any other policy in the matter. from me, which is borne out fuBy They want to be the money masters by the copy he has in his hands, h of the world. lot of what Dr. Lanka Sundaram said We are hearing of the free world will certainly get headlines in the and flhe non-free wt>rld. We are now-a- Press, particularly, his idea of the 23 P.S.D. 2 2 ^ Commonwealth 15 MARCH 1954 Finance Ministers* Sydney 2282 Conference l ^iri Bansal] rupee area and so bti. -But, was he is the Finance Minister himself in serious when he was ' riiooting this? this country thinking about it? Does he know what is the position of I was reading an interesting article our external trade' today? Our trade by Mr. Gaitskell who, I find, is just is stabilising at lower levels. The now in the gallery. He had made a terms of trade are going against our suggestion which, I am sure, would coimtry. I have the figures here; and have come to the notice of the Finance I am sure he also had those figures. Minister. He made a suggestion which Our terms of trade in recent months must merit very close consideration by have gone down from about 122 in this ^country. In fact, in my opinion 1956^51 to 89 in April-June 1953. When he gave an advice of desperation in your position of external trade is like asmuch as he suggested that if the this, to talk of a rupee area or a position about dollars worsens, we smaller area than the sterling area is must leave every country of the sheer moonshine. I am sure Dr. Lanka Commonwealth to itself; we must set Sundaram would realise that the sug some maximum limits and those limits gestion he has made would not do must be governed by the dollars that credit to his understanding of econo that country earns. I want to know mics. . ■what is the attitude of our Finance Minister to such a proposal. I am one with him when he com plained that the Finance Minister did My next question is relating to the not give this House sufficient infor- sterling agreement of U.KL with Japan. The ink on the Press Communique was laation as to what {happened in the Sydney Conference. I have another hardly dry when England, which was leading the Commonwealth countries grouse, that important subjects like in Sydney on discussions about com this should not be discussed at the mon policies, signed an agreement iiistance of one or two hon. Members with Japan absolutely unilaterally. In of* this House who happily happen to asmuch as India is going to be very vit be vigilant. Discussions o n these sub ally affected by that agreement, I want jects must be initiated in my opinion to know whether our Finance Minister by the hon. Minister in charge who is was taken into confidence even at the dealing with those subjects. Sydney Conference as to what Britain Dr. Lanka Soadaram: Let them put was going to do with regard to the down a motion. sterling payments agreement with Sliri Bansal: These are vital pro Japan. blems, and to dispose them off in a I have already referred briefly to the matter of two hours is, in my opinion, terms of trade. Again, I think it was to say the least, not doing justice to Mr. Gaitskell who pointed out in the this House. As my time is limited, I House of Commons that in recent Vould ask a few straight questions of years the terms of trade had gone the Finance Minister arising out of against Britain, excepting for the past the Sydney Conference. few months. The same is the position I notice from the Press commimique with India, but I want to know what that the Conference took a rather is the position of our terms of trade Micawberifih attitude about the reces- vis^a^vis U.K. and the ConrnionwealHi sionw in America. I do not believe that countries. The figures which I have a^depression of the type of the thirties quoted are relating to the terms of is likely to develop in America, but trade of India vis-a-vis the rest of the the, fact remains that recession i£ world, but before we know what is the ^fcing place there. I want to know position about the terms of trade *of ’Whether the Commonwealth Finance India vis-a-vis U.K. and the Common Ministers’ Conference did discuss a wealth countries, to jump to any con common policy about it. If Hot, what clusion like the one drawn by 22$3 Commonwealth 15 MARCH 1954 Finance Ministers* Sydney 2284 i: - • ' Conference Dr. Lanka Sundaram will not be doing regard to this big organisation of the justice to the Finance Minister. world. ^ . . o . My last .question is in regard to internal poUcjy, The p re ^ co n ^ uijique The next question I would ask the that was issued after the Sydney Con Finance Minister is about the future ference saysr' . u: e: of GATT. A vague reference was -r ; '/i ■_ f ( i' made in the Press communique that *‘Tbat on the:^cJMPflication fit some decision was taken as to the sound economic; v ;^ lic 3P depeiid?!/: future of GATT. But I want to know the purcha^ng power moaeyv; what is the ^attitude of the Govern <;ost of living, the ability : to jseU-., ment of India regarding GATT. As exports in increasingly cQUjpetitiv^v you know. I was a delegate to the last w orld markets. SliQBt fiwysfWing®; in • GATT Conference. I must say India the internal policifis j«f.oany£W«S! did not come out badly from that con member affect the external forw ference. but at the same time I must tunes of area take the House into confidence and say by creating excessive, demand that when America wanted Japan to imports diverting r^resmrc^ ironv. come into the GATT, they were all export Industrie and> throwing the- the time cajoling India, and wheti the b a i l e e of paymente out of^ United Kingdom wanted the waiver equilibrium.*’ - ;.., from the “no new preference” rule, they were almost begging India for I w ant to know w h e tto qur JKipance her support, but when India wanted Minister was a party to this stajeme^t some concessions—and those conces 4n the ,p5|^ comn^Liiite?* Ith^^er^inly sions were not something out of the comes as a surprise to me because in way; they were very ordinary t 3T?e of under-developed countries, embarking concessions for we simply wanted on huge programm«s^ deficit financing releases from certain agreements has come t& be acknowledged on rail which we had entered into with a hands as a legitimate’Tneans of tap few countries—we were cold-shoulde ping resources. The Finance Minister red. Our request for a reservation was has been in "At a Press Conference on the Then, something was said about the ^res^nt^ position of the balance of pay same date, (that is on th e 15th of January, 1954) Mr. Menzies and ments of this country and the lower Mr. Butler explained why the com level at which tWs country’s trade m unique h a d contained no refer stands Let us remember one ence to preferential trade within thing in relation to this sterling area the Commonwealth. Mr. Menzies arrangement. It is not only the indivi sa id that while th is question had dual country’s gain that we seek but emerged, and While the general the whole objective is that our balance sense of th e conference was that of parents position should be much might be done, it was not achieved at a higher level of trade for precise enough for statement in the the whole community in this arrange communique. Mr. Butler explained ment. that it was difficult to make gene ral statements on such a subject...” FinaUy, Dn Lsinka Sundaram quoted a sentence'from the Randall Commis sion re^rt. Unfortunately, I have not Let us note those words “it was diffi cult to make general statements on seen ttet' report and I could not pro- l^rly 'grasp that particular sentence. such a subject”. There is particiAar significance in this attitude taken by But, let us not forget that the RandaU Mr. Menzies because his country was Commission report has been hailed as not only the host country for this a considerable step towards liberalisa conference, but hi fact, his coilntry tion On the part of America. had a special grouse, inasmuch as Shri Sarangadhar Das (Dhenkanal they saw that Australian wheat was —West Cuttack): Hailed by whom, not taken by the United Kingdom may I know? when United Kingdom was buj^ng wheat with dollars in Canada on the Shri V. B. Gandhi: By those who ground that Australian wheat happens have considered the report. to be slightly dearer, although avail Shri Sarangadhar Das: Americans? able in sterling. Dr. Lanka Sundaram belittled the achievements of the sterl . Shri V. B. Gandhi: Of course, not ing area and said that the achieve Americans. Most of my sources are ment of a surplus of four hundred English newspapers like the Munches- million pounds in the last year, end ter Guardian, Economist and others. ing June 1953, was not the correct Dr. Lanka Sundaram quoted the figure. Economist In the next issue to which he made reference, you will find a Dr. Lanka Sundaram: I did not say whole article, an editorial,... that. I have finished.... Shri V. B. Gandhi* He said that Mr. Chairman: Then, I will call an someone proved it otherwise in the other hon. Member. If you have House of Commons and the correct finished, there is no point in still figure was ninetyv-four millions. Very taking the time of the House. Commonwealth 15 14ARCH 1954 Finance Ministers^ Sydney 2294 2293 Conference S hii Tulsdas (Mehsana West): This ^ is a debate; I do not think that any* position? I do not think we can com Member can do justice to the subject pletely say that our remaining in the by speaking for five or ten minutes. sterling pool has not been beneficial This is a very technical subject. to us. When we did want dollars for our capital requirements, we got I have been listening to the general dollars from the sterling pool. Though remarks of my hon. friends Dr. Lanka we have to contribute whenever we Sundaram and Shri Bansal. Somehow can, it is always a better thing to or other. I think that there is a certain remain in the sterling pooL After all, amount of feeling that the information it is a club and the members of the which the Members ought to have, has club have to function properly. not been made available. I think that It has been made very clear in the I must agree with that complaint that Finance Minister's Budget speech that the Members have not received the with regard to the policy of the sterl information that they should have ing area, each country is free to do otherwise received. w hat it likes and there is no quesr- tion of binding one by anybody else. The question at issue is the Comr Each country is independent and each monwealth Finance Ministers* Confer country has to look after its own econo ence and the decisions that they have mic conditions in its own way. taken. The present context of our foreign trade has to be taken into con There is no question of binding or sideration. I just heard somebody say any sort of compulsion. Therefore, if ing that our foreign trade is of the we get away from the sterling area, old pattern of the pre-war days. I as my friend said here, I do not know must say that the whole pattern of what wiU happen. I feel that in our our foreign trade has changed since interests, even of our foreign trade, the war. We are now exporting more we have to continue in the sterling manufactured goods. There is no ques area, and what has been said by the tion of exporting essential raw mate Finance Minister in his speech is per rials. If we have to export more manu fectly correct. That is the position. factured goods...... Even in a club we may find some Dr. lAiikg. Sundaram: More and times that certain members are not more. behaving properly. That does not mean that we must completely get away Shri Tulsidas: ....we have to cater to from the club. Since we get a certain the trade from those areas, which are, advWage I think it is better we in my opinion, important and which should continue to be in this club. are in the sterling area. If we get away from the sterling area, what will Now, what is the position with re be the position? Today, Japan is find gard to our economic set-up? Accord ing it difficult to sell their goods be ing to the communique, each country cause they have not got the same is entitled to get a certain amount of amount of sterling availability as a aid provided, of course, it has acted country in the sterling area has. Look in a satisfactory manner in the opinion at the position of Burma. We just of the other countries. Then, what heard only a few months back that about multilateral convertibility? That Burma said, we do not want any is a problem, and unless this sterling imperial preference because we have pool ultimately becomes a powerful got certain difficulties. If we are going body having multilateral convertibility, to completely get out of the sterling I am afraid there will be a certain pool and get away from the foreign amount of handicap. The aim of the assistance from countries like America sterling area is to reach that goal, and or other countries, what will be our if we reach that goal, then naturally 2295 Commonwealth 15 MARCH 1954 Finance Ministers* Sydney 2296 Conference there will be much more freedom in necessity of properly shaping our the whole set-up. In order to reach that internal policies. ^oal, it is not proper to say that we Shri Joachim Alva (Kanara): This should get out of the club and then morning I sent notice of three ques we will be much better off. On the tions addressed to the Finance Minis contrary, we may be still worse off. ter through the Speaker. They are as follows: Then, the most important point in “W ill the ihon. Finance Minis the communique and the statement ter be pleased to state: made by the Finance Minister is, I (a) whether India is irrevocably leel, that each coimtry should so tied up to the sterling bloc; manage its internal policies that the sterling pool is not unnecessarily (b) whether India will stick to the «aten away by undue demand being sterling bloc, even if countries made on it. Equally important to our other than those,of the dollar country, I feel, is a sentence in and sterling blocs make Berious Mr. Eisenhower’s statement, viz., inroads on the oil and gold ^‘economic preparedness is as essen monopolies hitherto held by tial to a nation as military prepared the Western bloc, thus upset ness”. Therefore, we must put our ting the currencies of the economy on a sound footing. Unless latter area; and we do that, it will not be possible for (c) how India hopes to overcome us to achieve any progress. the drastic limitation of the convertibility of the curren The other day we heard the Prime cies, which are the direct con Minister speak about the United sequences of the second world States giving aid to Pakistan. We have w ar?” taken a certain attitude in that matter. If a country takes aid from We should no more conduct "a another country we cannot say any purdah conference either in our thing. In the same way, if we take aid finance or in any other matter. We from other countries, no country can are on the high road to independence. object to it. If we have to take aid from India has been for long under the in foreign countries, we should belong to fluence of the purdah, ever since we a certain club where we have better had the oppressive British raj, and advantages. If we remain separate, today when they have become our we will have to please everybody to friends, still we say, we shall again g et aid. go into purdah, when it is a question of India’s economic or financial Dr. Lanka Simdaram: The old Mo policy. This House, consisting of lay Baap club is all right for you. men like myself, unacquednted with dollars or figures or high finance like Shri Tulsidas:. I think there are my hon. friend Shri Tulsidas, is en definite advantages in remaining in titled to get full information on any this club. It is not a question of a Ma vital topic affecting the future of our Baap club. country. This House must be taken into confidence, so far as rupees, Pandit K. C. Sharma (Meerut annas and pies are concerned. Distt.—South): Brotherly co-operation. When one or two Members from Shri Tulsidas: Unless our export the other side spoke of our loan to trade is quite big, I do not think we Burma, I almost put down my head can completely get out of it. We in shame and pain. Here is Burma, have got to import capital goods etc., the sister country to our right, while and that is why I personally think it Egypt is there to our left, Ceylon is no use our trying to keep away is down, and Afghanistan above; when from the sterling area. I am sure the Burma was war-ravished, she asked Finance Minister is fully alive to the for help, and we gave her some money 2297 Commonwealth 15 MARCH 1954 Finance Ministers* Sydney 2298 Conference [Shri Joadhim Alval to protect herself from the enemy. been a bureauctat all his life, and he When millions of rupees have been may know everything, but public life thrown away into Britain, either out is something different, and we, being of the sterling balances or by public men, ought to have been sup manipulation of the sterling bloc, we do plied with more information. When not take stock of these moneys; yet I got this shabby communique issued we have the temerity to ask, when will by the Ministry of Finance, I felt that Burma repay her loan? That question tons of paper are being wasted by the should never be asked in this House, Government of India, when small as long as our fundamental policy is journals run by us go to the wall one of friendship with Burma, and because we have no paper. Here is the in Asia, with Indonesia, China, Cey shabby communique telling us: lon, Afghanistan and Egypt. “There is no question of the Conference as a whole or any I want to mention one other thing. country participating. ..or any We have had devaluation of the policy being dictated to oiir coim- pound,, and following in its wake, the try.” devaluation of the rupee. We went into purdah, when we devalued our Policies have been dictated in purdah, rupee, and we did not invite Pakistan. and policies are being dictated by the Today Pakistan is doing puja at the Britishers even today. Ever since the court of the doUar-god for arms, be end of the war, we have witnessed cause we went first to do puja at the drastic limitations of the conver the shrine of the sterling. We did it tibility of currency. The answer without teUing Pakistan, and we did to this was given by them, as follows,. it in purdah, I make bold to say, with viz. we shall enthrone the pound all the sense of responsibility, in this sterling as a convertible factor, so House that Pakistan was entitled to that the world may follow it, and may know from India whether we had exchange the pound through their devalued the rupee or not. And why goods. did we do it in purdah then? We did I would like now to make a refer it to please the British Chancellor of ence to a speech of Mr. Robert Butler the Exchequer, the late Sir Stafford and quote one passage, which my Cripps—^who was, no doubt, a great hon. friend Dr. Lanka Sundaram, who friend of India—and his disciple Mr. made a really very good speech, and Hugh Gaitskell, who was here a few made 'uncomfortable the position of minutes ago. We devalued our rupee, those who belong to the majority in order to please Britain, who de party, forgot to mention. valued the pound, in order to get out of the tangle with the dollar area, that This goes to the root of our Defence she then got into. and economy. TMs is what he said: *‘I must emphasise that external What happened when we devalued deficit must be covered; otherwise, the rupee in India? There was the economic foundation to any outbreak of suspicion on the part of defence effort goes. That is why it Pakistan, and that suspicion has con must remain a cardinal point of tinued all along, and they have stuck U.K. policy to reconcile defence to it. I am mentioning all these things, programme with expanding ex just to point out that we should not ports ...... From whatever aspects do anything in purdah. We are all they are considered, the problems laymen, as I said earlier, and we are of an economically strong sterling entitled to get full information, on all area and a militarily strong « these financial matters. We know North Atlantic Territory are very everything on many subjects, but on closely associated. It may be this intricate subject of finance and questioned whether latter can deficit financing, we are altogether lay be solved while the former is ia men. The hon. Finance Minister has doubt.” Commonwealth 15 MARCH 1954 Finance Ministers* Sydney 2299 Conference H ere the cat is out of the bag. things from Russia and China, two big chunks of territory with millions The North Atiantic area is to be com of human beings. There is a lot of mercially backed up by the sterling misrepresentation made in regard ta area. They have finally ushered in our national border and frontier with an armed Pakistan by the backdoor China and Russia. I started off as an by means of American dollars. Here anti-Communist. But now you see is Mr. Butler making a responsible there is a real confusion. We have to speech and paying a great tribute look to geographic factors; Russia, to our hon. Finance Minister. Mr. and China are on our borders and we Butler lays a flattering unction have to have trade with them. These unto his soul. It is time we con GATT negotiations and the sterling, sidered whether we should remain m bloc do not permit us to do anything, the sterling area. Britain wants to be the banker of the sterling area. ThiA is a very important issue and Britain made us devalue our r u ^ on such an important subject we- and compelled us to sell to America should have devoted a whole day for and buy from the Commonwealth. debate. I shall give some instances. There must be an end to th^' Take Soviet oil. Soviet oil is goings, of business. to be dumped in the world markets. Today my hon. ^iend, Mr. Gadgil, What is going to happen? Shall we be made a very important point about tied up with the sterling area or shall we' have an independent economy? foreign firms coming into India and Our Planning Commission should look- establishing themselves as '(India) Limiteds’. They are threatening us. into this matter. Britain, at the Time was in 1947 when we used to Colombo Plan Conference, put all the- send Ihdian coloured representatives, emphasis on agricultural producti<3*i. we are now having European repre Their idea is that we produce the agri sentatives. At the rate that we are cultural goods and they produce in going our coimtry is going to be in dustrial goods and dump them in our- great danger. Millions of pounds are country. We should adopt the attitude sacrificed and we do not know what of sturdy gentlemen who have been- is going to happen. nurtured in the fight for freedom in our dealings with foreign nations. Tlie- Take the GATT—the General Agree old bureaucratic methods will not do. ment on Tariffs and Trade. Their We m ust say: *this is our money and: ' Secretary, Mr. White was here the you have had enough loot of our other day and I asked him one money. We shall not allow it to be question about Ceylon whith is taken away any more*. ~ entirely dependent for her bread Mr. Gordon Walker, cx-British Com and butter on rubber. Ceylon monwealth Secretary in an article in said: *If you do not buy frdte the Hindustan Times this morning: us, we will sell, to China*. Then the spoke about the split between the Secretary said that they gave in in Canadian dollar and the American, the interest of security. Under this dollar. Says he in effect: “We shall agreement, India has accepted a lot not buy from Australia, our blood of restrictions on her right to raise or brother, but we shall buy from lower her tariffs as she likes. We . Canada!” In the name of this shall neither raise our tariffs nor Commonwealth vanity, the interests lower them, because we are a mem of India are going down the drain. ber of the GATT. GATT is America We have to stop this. We have to stop' and Britain brought together. Soviet this and, in the interests of national Russia is not there. Today with our unity, this cannot go on. Sterling Balances in London, we can not buy from any non-sterling area. I now come to the question of We will have to buy from the sterling Soviet gold which is flooding the area, because Britain says so. What western countries. The world economy is the effect of it? We cannot buy will be affected by the Soviet goldL J230I Commonwealth 15 MAKCH 1954 Finance Ministers’ Sydney 2302 Conference IShri Joachim Alva] ^What is going to happen? Today the the interests of the sterling area. We world is having a shortage of gold. have to keep our sterling balances We are paying dollar through the strong and freely convertible so that ^sterling and when the gold shortage w e can m ake good our 700 crore •overwhelms the sterling market wftiat rupees. is going to happen? These are points [Mr. Deputy-Speaker in the Chair'i on which the Finance Minister must take us into confidence and must give The second point which is equally lull information to the House. We important for our aligning with the entitled to know more in detail sterling bloc is our historic relation- ithan the information that has been ^p . We have been dealing with :supplied to us in the Communique of sterling countries for the last few 4he Ministry of Finance. I have no centuries. Even today, our foreign jtime and I shall explain to you later trade is mostly with the sterling area iOn how this sterling business is a countries, and also with America vdanger to our country. though to a smaller extent. But with the third bloc namely, the Communist S h ri Morarka (Ganganagar-Jhun- bloc,-^ur foreign trade is almost jhunu): Sir, when we received the negligible. jfirst intimation of the intention of the Jion. Member in opposition to raise a At this stage. Sir, I would like to discussion on this subject, I wonder- give you a few figures. At the end of ■edr—purely on the economic ground— the 1948, our total im port trade what could be the criticism of this amounted to Rs. 470 crores, out of ^Conference. By this 1 do not mean to which our trade with sterling coun say that on political grounds, the tries was Rs. 355 crores. w ith the parties who are wedded to different dollar coimtries Rs. 109 crores and political philosophy cannot criticise with the Communist countries only -our participation in this Conference. Rs. 7 crores. Similarly, our export for But, purely from the economic point the same year was Rs. 330 crores out of view, and keeping in mind the free- of which Rs. 220 crores was with the •dom and sovereignty which this Con- sterling coimtries, Rs. 70 crores with ierence allowed to each coimtry to dollar coimtries and only Rs. 8 crores enjoy, I have been wondering what w ith the Commimist bloc. In 1952-53, •could be the possible criticism that out of a total foreign trad e of Rs. 450 be made against such conferences. crores. Rs. 272 crores was with sterl- ^ I must confess vexj franldy that even ing coimtries, Rs. 181 crores with after hearing the entire debate this dollar countries and Rs. 4 crores with afternoon, I ihave not been able to Communist countries. Similarly, in our loUow the possible criticism that hon. export trade out of a total of Rs. 377 “Members have against this Confer- crores, Rs. 264 crores w ith the sterl ‘cnce. ing countries, Rs. Ill crores with the dollar countries and only Rs. 2 crores Shri V. F. Nayar (Chirayinkil): with the Communist countries. Looking -you will take some time more. to our foreign trade, I think, one can Shri Morarka: There are many not but say that our remaining in the reasons why we should align our sterling bloc is vital necessity. selves with the sterling bloc. First In these days, the idea of self and foremost, is that we have got to sufficiency or the policy of isolation in our credit more than 700 crore rupees every thing is not only politically un worth sterling and in order to make wise but in my humble opinion, it is our position secure, we have to see economically wasteful. * that the sterling currency remains strong, stable and convertible. It is Then, Sir, I wish to invite the atten -not in anybody else’s interests but in tion of this House to the aims and iur own that we have to safeguard objects of this Conference. First and Commonwealth 15 MARCH 1954 Finance Ministers* Sydney 2304 2303 Conference foremost is the development and ex the communique of the Sydney Con pansion of international trade. Second, ference. It is as foUows: to oppose closed system of discrimi “The Commonwealth has great natory arrangements which can lead resources, natural, himian and in only to chronic restrictions and recur dustrial. The need for their ring crises. Thirdly, to devise ways development is urgent and indeed, and means to see that the gold and vital.” dollar reserves are not imduly depleted and to ensure currency convertibility. Then it goes on to say: Last, but not the least, is to afford an opportunity for free and frank dis “In some countries of the area,, cussion on many points of common development plans have been interest. made to provide for some basic improvement in tiie standard of living which is the necessary There is one point which I must foimdation for further economic particularly refer to here. Hon. Mem bers have complained that sufficient development.” information is not supplied to this About the factors affecting the scoper House. I do not disagree that suffi and pace of development, the Confer cient information is not supplied, but, at the same time, Sir, even the infor ence said: mation which was supplied has not “Supplies of goods for develop been, I regret to say, read by many ment have much improved. But hon. Members. in most cases, finance is still the major factor limiting develop Shri S. S. More: Is it not a slur on ment. Each of our Governments the hon. Members. Sir? will continue policies designed to secure the highest possible level Mr. Depoty-Speaker: It is possibly of internal savings. However^ somewhat true in some cases. most individual countries and the sterling area as a whole still need Shri Morarka: There is a passage additional financial resources from in the information supplied to us, outside.” which says: Sir, I do not think that even the“ “There is no question of the Members of the Opposition could say Conference as a whole or any that oiu* problems are in any way participating coxmtry dictating different from those enumerated by~ any policy to individual countries, the Conference and our remedies are who are sovereign and indepen dissimilar to those suggested by the* dent and free to pursue policies Conference. which they consider in their best interests.” Finally, I wish to refer to some figures about the central reserves. At Every country which is in the sterl the end of 1948, the central reserves- ing bloc has got full economic free w ere reduced by 64 million dollars, dom so much so it is free to regulate out of which India’s responsibility was^ its trade either by physical quota to the extent of 56 million dollars,, system or by tariff policy, free to fix that is, a little over 82 per cent. In and maintain any price level at home, 1952, the total contribution made by free to fix any bank rate and dis the coimtries was 161 m illion dollars*, count rate at home and free to fix out of which India contributed 70" the rate of exchange and to value, re million dollars, that is, a little more value or devalue its currency, in any than 44 i>er ccnt. manner it likes. Then about the development needs, the Conference Sir, I do not think one can attribute- said, I am quoting some passages fr<»n any motives to any member coimtry ^ 3 P5 Commonwealth 15 MARCH 1954 Finance Ministers* Sydney 2306 Conference [Shri Morarka] .and suggest seriously ;that any coiin- The new Payments and Trade Agree try of the Conference has benefited ment was actually signed on the 29th at the cost of another country or that Jan u ary 1954. As this Agreem ent, one country is exploited by another which was the second agreement, did -country. I think hon. Members can not raise any new point affecting very rightly appreciate the fact that India, it was not necessary to consult India is fully justified in remaining in us before the agreement was actually the sterling bloc and that purely on signed. The new Agreement is on the the economic ground, nobody can same lines as the Agreement of 31st seriously criticise that India has A ugust 1951. D uring the negotiations 1 suffered in any way or is likely to leading to this latter Agreement, suffer in any way by remaining in which took place in Tokyo, our re the sterling bloc or attending these presentatives in Tokyo were kept -conferences and making some co fully in the picture by the United operative effort on voluntary basis to Kingdom negotiators and the Govern wards implementing the financial ment of India were also informed of arrangement and development plans. the developments from time to time. Shri C. D. Deshmnlih: I am glad The main features of this Payments that you restricted the length of this Agreement were that all payments debate to two hours, not because it between residents of the sterling area encroached on the time available for and the residents of Japan would take the Budget, but because I think hon. place as before in sterling. Japan Members have not even well utilised would be permitted to utilise her th e tw o {hours th a t you have allowed. sterling for financing direct current Some of them have indulged in mis transactions with certain non-sterling conceived critici^ or even wild rant area countries and both parties would ing, tinged by a certain amount of consult together in order to keep personal venom, for which I cannot Japan’s sterling balance within think of any justification. ’ reasonable limits. Japan, I may add, is now experiencing a shortage of Before I come to the observations sterling. But the situation was diffe made by hon. Members—at least such rent then. But under the agreement of them as call for an answer—I think the old convertibility clause under I should deal with two points which which any excess over specified limits form a sort of background. One ques of sterling held by Japan at the end tion has been raised incidentally and of the agreement period was to be had better be put out of the way, converted into dollars was abolished. tiiat is th* question of Anglo-Japanese Payments and Trade Agreement for This Agreement was, therefore, wel th e year 1954. In N ovem ber 1953, the come to all the sterling area countries, U.K. Government informed us that as as it enabled them to trade more the existing payments agreement with freely with Japan without fear of its Japan was expiring on the 31st Decem ultimately involving in dollar pay b er 1953, they had asked the Japanese ment. Prior to this Payments Agree <5bverhmetat to send a representative ment there used to be annual trade to London to discuss the pajrments negotiations between Japan and sterl arrangement for 1954. They had also ing area countries with a view to . asked us. India, for estimates of our balancing estimated payments during likely payments for imports from, and the ensuing year. We used to be as likely receipts from exports to, sociated in this, annual trade negotia Ja p an during 1954. The Govern tions. With the signing of the Pay- , ment of India were thus inform ments Agreement of August 1951 it ed beforehand that negotiations was no longer n^essary to have an were to be undertaken for the overall trade agreement with Japan, ' ^«xtex»ion of the P a re n ts Agreement. since it was no longer essential to 2307 CrnnmonweaWi 15 MARCH 1954 Finance Ministers* Sydney 2308 Conference b alance payments meticulously by pected to be consulted by U.K. in each country with Japan. their bilateral trade agreements with other countries on behalf of herself The new Payments Agreement for and the colonies. 1954 departs very little from the above A greem ent of 1951. In view of Japan’s The other issue is the general issue shortage of sterling during 1953, Jap an of India’s being a member of the has been permitted certain additional sterling area. I am afraid, I shall credit facilities in the nature of swaps have to take a little time over this of sterling for dollars. Moreover, the because this is, believe, the first U.K. Government has agreed on be comprehensive opportunity I have of half of the United Kingdom and the explaining the implications of India’s Colonial Grovemments for which she membership of the sterling area. The is responsible to liberalise imports sterling area is the product of a long from Japan so as to enable Japan to history of evolution. Prior to the earn more sterling. This Agreement First World War, sterling was the does not affect the right of the inde dominant international currency and pendent sterling area countries like London was the world’s financial India to determine their own trade centre. Sterling was convertible into policies vis-a-vis Japan. gold, but since it was used inter nationally as a medium of exchange and as a store of purchasing power, So far as India is concerned, we it came to be said that gold itself was have treated Japan as a soft currency on the sterling standard. country ever since the 20th October 1951, although most of the coimtries During the inter.-war period, cur of the sterling area continue to treat rency systems and exchange rates all Japan as a hard currency country. The over the world were subject to pres new Trade and Payments Agreement sures and the old gold standard be does not, therefore, affect our trade came unworkable. U.K. went back to policy with respect to Japan. In the gold bullion standard in 1925. The meanwhile, a Member of Parliament __ experiment proved short-lived; partly I do not know whether it has been because of the onslaught of the world answered or not—has put down a depression and. as you will recall, in question addressed to the Minister of 1931 the gold standard was given up Commerce and Industry as to whether and sterling became a managed cur the ne'w trade agreement signed by rency. India continued the link with the United Kingdom with Japan sterling because then she had very little which liberalises imports from Japan, choice and it will be remembered that will not affect our cotton textile ex several Dominion Governments and ports to these areas and consequently even some independent countries whether the United Kingdom Govern followed this course. Thus Australia, ment should not have consulted us New Zealand, South Africa, Egypt, before signing the Trade Agreement. Iraq, Portugal, Norway, Sweden, Den Sin^U.K. itself is mterested in cotton textile exports to the colonies, we mark, Iran, Japan, Argentine, Uruguay, must presume that the danger of com Yugoslavia and Greece—^not to men petition from Japanese textiles has tion the colonial territories—came to been taken into account by U.K. form what was known as the sterling while entering into this particular bloc. This could be said to be the agreement, I believe there has been origin of the sterling bloc. some discussion on this point in th» The decision of so many countries British Parliament. In any case, just to get their currencies linked to sterl as the U.K. Government does not ing area was motivated by the desire interfere in the individual trade poli to anchor themselves to a currency cies of the independent sterling area which on tiie whole stlU promised to countries, India can hardly be ex- remain relatively stable. Entry into Commonwealth 15 MARCH 1954 Finance Ministers* Sydney 2310 2309 Conference [Shri C. D. Deshmulth] or exit from the sterling bloc involved All Hon, Member: Not Canada? no formalities. No permission of the U.K. Government was necessary for Sawi C. D. Deshmukh: Canada h as either purpose and the members her own doUars. She is a member of within the bloc would change the the Commonwealth but not a mem external value of their monetary unit ber of the sterling area. The sterling as they thought best. area covers about one-fourth of the world’s population. The total trade of the sterling area countries amounts to Now, the sterling area in its present about 25 per cent, of the world’s form is the product of wartime and foreign trade. Not only is the bulk of post-war needs. It is a smaller and all sterling area trade financed in somewhat tighter group. The term sterling but a proportion of the trade “Sterling Area” came to be used about not belonging to the sterling area is 1940 when, as the report of the Bank financed from London. The sterling of International Settlements puts it, area countries constitute the largest ‘It began to operate as a single mone group of countries within which there tary area within which with few is a very large measure of freedom in exceptions freedom of payment was the matter of exchange transactions. preserved while at the same time Although sterling has had its vicissi import restrictions were applied by tudes and the gold value of the sterl the various members in their rela ing area currencies has gone down,, tions with outside countries. the area has a long record of com parative monetary stability. Between Since shortage of dollars has been 1913 and 1952 while the gold value of the main problem in the war and post some of the countries in Europe like war period, sterling area countries Belgium, France and Italy went down have been pooling their dollar reserves by 95 to 99 per cent, that of the each drawing upon the pool according British pound and associated curren to the need and circumstance, and in cies went down by 66 per cent, or so. conformity with the agreements with The fact that in 1949 when sterling the United Kingdom which are fairly was devalued, several countries which flexible. The responsibility for for accounted for two-thirds of the world’s trade also followed the same course mulating and applying the necessary is a demonstration of the position held regulations and controls for conserv by the pound in the world trade, ing dollars rests on each member which proves conclusively that there country but there is considerable co w as no purdah devaluation here. ordination of these through consulta tions with the United Kingdom and through discussions among members Now, Sir, India’s interest in the at conferences like the Sydney Con^ sterling area arises from the follow ference when the Commonwealth ing f^cts. About 38 per cent, of its Ministers meet and discuss common export trade is tdday with sterling problems. India, being an important area countries. Secondly, India has member of the Commonwealth and of normally a balance of payments deficit the sjterling area, liherefore partici with O.E.E.C. (European countries) pates in these conferences. and India’s membership of the sterl ing area facilitates the financing of The sterling area includes at pre this deficit from the E.P.U. in sterl sent, besides U.K. and Colonial t ^ - ing. Thirdly, India holds, as was tories, India, Pakistan, Ceylon, Burma, pointed out by one hon. Member, Australia, New Zealand, South Africa, sterling balances of the order of 745 Ireland, Iraq, Iceland, Jordan and crores; and the stronger tte British pound, it is commonsense, that the Libya. Conference b etter it is for us, since all our eggs monetary policy. One can expand or are in that basket at this moment, contract domestic circulation accord owing to historical reasons. Then, ing to need and one is free to adopt banking and financial relations with export and import controls to one’s or through Londoii are, again for requirements. If, of late, we have not historical reasons, an important part been using up sterling reserves, that of the mechanism of India’s foreign is not due to any complaint arising trade. India’s membership of the from our membership of the sterling sterling area may thus be said to be area. It is due to unforeseen circum a matter of trade and banking con stances. Principally, it is due, of venience rather than of monetary course, to the improvement in our policy. Lastly, although India has a agricultural production and to a very pooling arrangement in respect of- favourable monsoon. We intended at dollars and we contribute our dollar one time to import 2 9 million tons earnings to the Pool, we have over of foodgrains and I believe, in the the last several years drawn more year that has ended—I refer to the from the Pool than we have contri calendar year— we imported about buted to it, at least so far as the one million tons less. Then, we had a post-war period is concerned. I point better cotton crop aad therefore, we this out to show that whenever we imported far less of American cotton need convertibility of the sterling that than we had ori^aally anticipated. we hold for purposes which are essen These are factors wkich cannot be tial for our development, then it is very well foreseen. In any case, there always granted to us, and we have is no bar to our adopting corrective had no difficulty in utilising the measures and these are being under Central Dollar Pool in our interests. taken now. I have referred to them as a lactor of safety in countering Now. you would ask whether the any potential inflation that may be membership of the sterling area im there in the deficit financing which I poses any limitations on the country's have proposed we should resort to for freedom to pursue its own monetary the purpose of our economic develop policy. The answer is “no”. An in ment. dependent monetary policy under the present day conditions m eans scrRp Now, Sir, there is one small matter, fixity of exchange. It cannot be said although no Member has raised it. that the British pound is an unstable There was a complaint that our currency the link with which is of balances in London earned too low a no value. Even an independent cur rate of interest. That has been recti rency has to have some relationship fied now because rates of interest, with major world currencies. What even for short-term money, have gone this relationship should be can under up and today we are earning a reason present arrangements be decided able rate of interest on our sterling freely by each member of the sterling balances there. The Treasury rate it area. Any country can vary its exr self is two and a half per cent. Counr change rate as and when it so desires, tries which have an independent cur consistently with the obligations aris rency system have also to hold some ing out of its membership of the foreign exchange reserves. They may International Monetary Fund. We all hold them in various currencies and know that Pakistan was not compel some of them might fluctuate a great led to devalue her currency in 1949. deal. In many cases they have to Leaving the rights or wrongs of that evolve clearing arrangements, (as decision, the fact itself is significant. European countries have done by Australia appreciated its currency In way of European Payments Union), t>ecember 1951. If one is free to Vary and work out arrangements by which one’s exchange rates, one is corres they exchange with one another pondingly free to vary one’s internal mutual credit for short periods. In ’ 3 P.S.D. 2313 Commonwealth 15 MARCH 1954 Finance M inM erriSm m rT^ Conference [Shri C. D. Deshirukh] is because most of these banks hav« the alternative, they have to run an international connections. Over a elaborate system of exchange con period we should try, and we are try trols with multiple exchange rates and ing, to develop similar connections; similar complications and restraints but this naturally takes time. Indian originating. Argentina, for instance, banks have of late been opening has a number of official rates and the branches in countries where there is kerb rates are higher and fluctuating. an Indian community, for instance, Brazil also has kerb rates which vary in Burma, Singapore, Hong Kong, significantly from the official rates. Indonesia and East Africa. But, we Our membership of the sterling area have to continue to use the services has not prevented new lines of trade of London’s highly developed finan developing or new alignments in ex cial institutions if our foreign trade ports and imports taking place. Be relations are not to suffer a serious fore the war, our trade with the joit or break. United States of America and Canada, for instance, was only eight to ten I come to the problem of converti per cent, of the total, while now it is bility. The main handicap.... about twenty per cent,, not including Some Hon. Members: Do we sit and in this the exceptional levels of food finish? It is already seven o’clock. im ports in 1951-52. One hon. Member Mr. Deputy-Speaker: Is the hon. referred to the components of our Minister likely to finish in half an trade and complained that it has not hour or ten minutes? changed. Here are some of the figures S hii C. D. Deshmnkh; I should which I think would be found reveal think so; ten minutes. ing. Our imports of food, drink and tobacco were, 14 per cent, of the im Some Hon. Members: Let us finish. ports in 1938, 28 per cent, in 1951 Shri C. D. Deshmukh: The main and 31 per cent, in 1952. Our imports handicap of the sterling at present is of raw materials were, 24 per cent, in that it is not convertible. The position 1938, 29 per cent, in 1951 and 30 per of the sterling is much better than it ■cent, in 1952. Our im ports of m anu- was a year or 18 months ago. The ifactured goods were, 62 per cent, in gold and dollar reserves have improved 1938, 43 per cent, in 1951 and 39 per to a level of 2,500 million dollars -cent, in 1952. Now in regard to ex although the present level, it is re ports, food, drink and tobacco etc. cognised. is not quite sufficient to w r e 24 per cent, in 1938, 22 per cent, warrant a dash to convertibility like in 1951 and 25 per cent, in 1952. T hat the unfortunate thing in 1947. To has been more or less steady, our raw bring convertibility nearer, every mpterials exports, on the other hand, member country has to follow sound liave declined from 46 per cent, in internal policies in its own interests, 1938 to 22 per cent, in 1951 and 24 and promote development which would per cent, in 1952. Correspondingly our strengthen its own and the sterling exports of manufactured goods have area’s balance of pajrments position. gone up from 30 per cent, in 1938 to There is no clash here between the 56 per cent, in 1951 and 51 per cent, interests of the individual countries in 1952. Therefore, there has been a and those of the Commonwealth or very real change in the composition the sterling area as a whole. To sui>- of our trade. port convertibility in the early stages, 7 P.M. there is need for external support from the International Monetary We continue to make use of London’* Fund, from the Federal Reserve .sys financial connections and it is true tem or from the United States Gov that a large part of our foreign trade ernment. The possibilities in this direo* ^ financed by Exchange Banks. This tion are being explored. Of course, n* Conference o ne can forget that the present handi word for it that we did not disouss cap of the sterling is convertibility. the subject. There are certain handicaps in the Dr. liawka Sondaram: I am pre situation—that is why no major deci pared to take the word of the hon. sions were taken in Sydney—like the Minister. What I said was that in ths further course of recession in U.S.A. documents that were circulated to us* and its effect on the sterling area not a word was mentioned about 'earnings and reserves, and the trade imperial preference, but that Mr. Butler policy that they decide to adopt, not made a number of references to It to speak of possible support that one can get from the International Mone tary Fund, not to speak of the atti Shri C. D. Deshmuldi: I am not tude that would be taken by the responsible for what the Chancellor O.E.KC. countries. Although advance has said. The Chancellor referred to towards convertibility in some form preferential trade which is quite a or other occupied the stagtf a very different matter. He had at the back ;great deal in the Prime Ministers* of his mind previous discussions that Economic Conference in December have off and on taken place in regard 1952, in Sydney, all that took place to imperial preference at GATT and was a review of the events and, so other meetings that were referred to to speak, a consolidation of the posir by one hon. Member. It is generally tion. The major factors of un known what our attitude in regard certainty still remain, namely, the imperial preference is. We have not attitude of the United States Govern had an opportunity of having a full- ment, their trade policy, the kind of dress debate on imperial preference, support that could be expected from but we have studied the question very the International Monetary Fund and carefully and at the appropriate the possibilities of collaboration from moment I have no doubt my colleague, the O.E.E.C. countries. So far as it the Minister for Commerce and In lay in my power, I tried to indicate dustry, will take the opportunity o£ to the House all that happened in telling the House what the thinking of Sydney, and that there was no con the Government in this matter is. As scious suppression of any decisions far as we can discover today, there is taken that would affect the fortunes no imperial preference which is hurt of this country. ing us, and it is possible to establisfli that on the whole we are deriving There has been a reference made advantage from the present system of here to imperial preference, but I imperial preferences which is now challenge the hon. Members to pro restricted by the agreements arrived duce a single reference to imperial at at the GATT. And all that hap preference in the communique or any pened was that there was a reference of the literature officially published. possibly to preliminary consultation They have not been able to do so for sometime—^maybe in June, Ju ly o r the simple reason that this subject September—in order to ascertain the was not discussed in Sydn^. attitude of the Commonwealth couxv- Shri Bansal: Permit me to say, Sir, tries in regard to the renewal ol that although there was no reference GATT which are the general agree made to it in the official communique, ments on trade and tariffs. That kind "there was constant reference to it in of discussion takes place before every GATT meeting in London. The Com a number of statements appearing is monwealth countries or their repre -the press from Sydney. sentatives, when they gather together, Shri C. D. Desbmakh; All those discuss this. Beyond that the matter references were* wrong and miscon- | was not even mentioned. The only celved, because there was no discus other reference made to GATT Is sion, and Parliament has to take my where it is said that together with Conference IShri C. D. Deshmukh] Uie rules and regulations of the Inter Mr. Depaty-Speaker. The hon. national Monetary Fund there might Member may feel that all the foreign be some representation that the rules banks have not played very rightly of the GATT also may be changed. In with us. The hon. Finance Minister that respect also, our attitude is well does not say that every one of those known, that generally we are not in banks have been exceedingly good favour of giving freedom to any coun towards us and that is his general try or to coimtries to create new opinion regarding these banks. imperial preferences. I did not go into that matter because, as I said, Shri C. D. Deshmnkh: I expressed, this matter was not discussed in no opinion about the merits of their Sydney at all. working. I have referred to their posi tion in this country today, and if hon. Sfari Joachim Alva: There is one Members wish to elicit any informa doubt in my mind. How does the hon. tion, it is open to them to ask ques Minister praise or exaggerate the role tions. of the foreign exchange banks in this country which have strangled our Shri K. K. Basu: We want to know economy? Why was permission given Governm ent’s view. to a British Bank from the Middle Shri C. D. Deshmnkh: We are not East to take the place of a Dutch concerned with that matter here, in Bank? the limited time at my disposal. That Shri C, D. Deshmokh: Do you ex is all the submission I am making. pect me, Sir, to answer this irrelevant There was some reference to com interruption? I have only a few modity agreements. That is the point minutes more. which hon. Member Shri Bansal, I Mr. Depniy-Speaker Does the hon. think, had in mind—not preferential Member suggest that it was part of tariffs but commodity agreements by which it might be possible for the Uie Sydney talks? Commoi.wealth countries to buy each< Shri Joachim Alva; No, Sir. The other’s produce at certain stated and fcon. M inister praised the role of the stabilised prices. It was only in that foreign exchange banks which have connection that there was some refer strangled and still continue to strangle ence made to preferential trade agree the economy of our coimtry. TRat ments, but no imperial preferences^ question has never been satisfactorily which term has a special connotation. answered. ■'"TThen I must deal with this charge Shri C. D. Deshmnkh: The hon. of not giving information to the Member is welcome to have his own House. As I said earlier, I have given view, and I am not answerable to a gist of all that happened. The only him for my view. I stated what I thing that I have not given, and I thought about the matter from the could not give is the gist of state historical and other points of view as ments made by other countries in part of the sterling area agreement. regard to their internal policies. That Shrimati Rena ChakravarUy (Basir- was one, and the other was the figures liat): He is also a Member of the furnished by other member countries, House. in regard to their balance of pay ments, deficits or otherwise. Those Shri C. D. Deshmnkh: He may be a figures are their own property. They Member of the House, but I do not were willing to discuss them in a owe any responsibility individually to common meeting, in order to arriVe the Members at the House. {Inter at some sort of estimate of the trends ruption) . for the future for the sterling area 18 MARCH 1954 Finance Ministers' Sydney 232O Conference as a whole. E\’en those figures can of subjects discussi^ have been given not obviously be given, becaiise thect in the oififcial com ^uniqu^, the can always be difference of (^(iiiiOD lanj^^e df which I am not interested as to what the future shows wiU be to defend, as well as in the other adequate or not. Once these kinds of sta^m ^ts that 1 have made. Whether views are taken, then all kinds of hon. Rlrabers find it satisfjang or not currents start in intemationai trade, cahhbt be really my concern. AH I am and make the position much more contierhfed with is to tell them ais best difficult. Therefore, it is the practice as I cah wHat happened at Sydney, of every country not to give out any and that I have done. forecast in regard to its balance of payments for the next six months, or Various questions have been raised the next year, or whatever it is. in regard to our trade deficits and Apart from the fact that these fore our ^erllng b^ahces. I have not quite casts are proverbially unreliable, one grasped what hon. Members* point of has never been able to make very criticism is. I have already said that accurate estimates of what the bidance it is our intention to establish an of pajmients is going to be. That is import surplus, in order to be able to another reason why it is not s&fe to use dur sterling balances, rather than make any forecast in regard to the leave them unutilised as short-term future. Therefore, all the paiblislxed loans in London. I can only regard as material refers to the progress of the bizarre a suggestion made by one hon, central gold and dollar pool, so far as Mtember that because I cannot utilise the past is concerned. We get figures, them; I have not been able to utilise I think, every quarter, and those them for over one year, I should pro figures are published, perhaps, with mote some industries abroad or start the lapse of a certain quarter or* some some development projects abroad. I period; in other Words, sbnie ihtiltv^l see that that hon. Member is not in elapses before those figures are made his seat. public. One must be pri^ared to draw Sliri M. S. G m ny: I am conclusions from the publish^ figuivs, here. *and one must trust one’s o ^ repre sentative in regard to the participa Q«1 C. b. PeittiiHiiai; i am sorry. tion in those discussions in regard to Sliri S. S. More; He is too thin to the future of the common currency. be noticed. As I said in Sydney, this matt^ Shri C. D. Deshmnkh: I hope the of convertibility was not also men hon. Member will take note that we tioned even, obviously for the reason need it very badly and we hope to ihat it was recognised that there be able to utilise it for the imple were various uncertain factors which mentation of our plans. had first to become stabilised, before any decision could be taken. That Then the same hon. Member en decision would fall to be taken only quired why it is necessary that we by the United Kingdom, becau, [Shri C. D. Deshmuldi] bracket for any period hBt development of the Commonwealth reached the rate of four per cent, countries. He indicated tha various pa* annum, the Fund and the channels through which this money member shall consider means by could be made available, as lor wtiich the Fund's holdings of the instance, a direct loan on the London currency can be reduced. There market or through their new Developr after. the charges shall rise in ment Corporation or through a fund accordance with the provisions of which they have only for the develop tc) above.” ment of colonial territories. I said that since we have unutilised sterling i.c. they go even beyond 4 per cent— balances to the extent of Rs. 250 crores, we were not standing in the ‘‘until they reach 5 per cent, and queue, because we saw no point in failing agreement, the Fund may borrowing money in London at 4 per then impose such charges as it cent, or 4i per cent, and keeping our aeems appropriate.” own money at a much lower rate of interest in London in the short-term Here, this is essentially a short-tem market. That is why we have said debt given for ironing out the in- there that so far as India is con equaUties in the year-to-year trade, cerned, there is no intention of going and every member country is suppos to the London market. Therefore, all ed to reDurchase its currency within the criticism that was leveUed at this a reasonable period. H it fails to do by the hon. Member is perhaps under so, it expose itsell to the liability to a misunderstanding of wJiat hap oay an indefinitely high rate ol p en ed a n d is really befilde the point. mteacest. T herelore, it is, Sir, th a t I say that it was very necessary lor 1 1 have covered most of the us to get rid of this incubus. important points that have been raised, unless hon. Members feel that any Then, reference has been made to point that they have raised has not out floating a loan in the London been answered. Sir, I cannot find any market. Now. all that happened was other point which calls for an answer. that the ChanceUor of the Exchequer was able to announce that this year The Houie then adjourned till Two the London market might be able to of the Clock on Tuesday, the 16th find some surplus sterling for the March, 1954.