845.01/9–347: Airgram

The Ambassador in India ( Grady ) to the Secretary of State

confidential

A–207. I discussed with Bajpai1 yesterday the difficulties we were experiencing in getting favorable consideration, in fact any consideration, on a number of matters which I have taken up with the various departments of Government since my arrival here. Apparently the Office of External Affairs has as yet little influence on other departments. When the Government is in a position to have regular meetings of the Ministers, it is expected that there will be improvement. Bajpai stressed the great weakness of administration and properly observed [Page 166] that good and adequate administration is basic to the success of government. He pointed out in this connection that the Government of India should have at this time, based on conservative estimates of requirements, 1,200 ICS personnel, whereas it has actually 410.

He queried me quite unofficially on the matter of loans to India. I stated that I felt that if the Dominion Governments solve their initial problems of organization and the economic and political situation reverses the present downward trends so that the outlook is promising, I saw no reason why application for private credits on the part of industries from American banks would not be in order, and that the Government of India might for its large public works approach the International Bank and/or The Export-Import Bank.

I told him quite frankly that I could not at this time favor any loans for India. I hoped that in six months or a year the situation would warrant my cooperation if the Government of India wished to approach either of the above mentioned agencies.

Grady
  1. Girja Shankar Bajpai, Secretary-General, Ministry of External Affairs and Commonwealth Relations.