891.00 TA/3–353
Memorandum by the Deputy Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (Jernegan) to the Secretary of State1
Subject:
- Your request for information about the $200 million 1954 program for India.
The new government of India, non-communist in character, is faced with grave and perplexing problems of establishing workable and lasting democratic institutions and of meeting inter-related economic problems of food shortages, agricultural development, land reform and balanced industrialization. It is the largest country in free Asia and potentially it could be a powerful force on the side of the free world. Conversely, its loss through communist control or alignment would constitute a most serious blow to the position of the US and its allies in Asia. Its location geographically and the magnitude of its problems make it vulnerable to communism.
In gaining independence the Congress Party emphasized the burden upon the people imposed by colonial status and the benefits which would result from freedom, economically as well as politically. In its efforts to meet its commitments, the GOI has developed a Five-Year Plan which, if successful, will result in only the minimum necessary progress. To accomplish this much, however, it is estimated that for the next three years outside financing not now in sight at least to the [Page 1692] amount of $730 million will be required. The proposed $200 million for fiscal 1954 is directed towards this essential need for economic development. (See attached letter of Oct. 28, 1952 from Amb. Bowles.)2
The US program continues to stress improved agriculture and over three-fourths of the total amount is allocated either directly or indirectly for this purpose. The community development program is the heart of it, and the proposed 150 community centers are expected to reach 30 million people. Small sums are tentatively allocated to health and sanitation, education, public administration, and transport and communications. A specific breakdown is attached (Attachment 1).3
New national elections will have to be held at the end of 1956. The intervening years provide us with the opportunity of showing that Western democracy is willing and able to assist a democratic India and of establishing in India that the democratic way of life does hold for Indians the possibility of improvement.