Tag Archives: Public Law 480

India: Some Economic and Human Points

Glendora Press – Oct. 12, 1969

India: Some Economic and Human Points

(Editor’s Note: For two years prior to joining the faculty of Glendora High School, Dwayne Hunn served the U.S. government as a member of the Peace Corps. For the next sev­eral issues the Glendora Press will carry articles by Mr. Hunn in which he vividly describes the stark reality of life in teeming India and some of his experiences there during his Peace Corps duty).


Patience has not been a particularly American virtue. Perhaps, due to this, some of our successes have come.

Yet many of the underdeveloped nations have developed a culture premised on an abundance of patience. To many Westerners this patience seems better defined as indifference or apathy. But they have also had certain bases for this fea­ture which we have not.

Many of these nations have had civilizations running into the thousands of years. Perhaps human nature drifts from conservatism, to patience, to indifference through such a span. Many are located in energy sapping climates. Due to such factors they have been left behind in science and tech­nology; and population, in the meantime, has aggravated the human economic situation.

Foreign aid and patience returns this thesis to India. A few facts and figures gives some credence to the belief that perhaps the amount of foreign aid and patience should he tied together.

U.S. Economic Assistance Expenditures, 1945-65

Per Capita            Per Capita Rank

India                                          $11.16                 19

Korea                                      $136.88                   5

Taiwan                                    $182.07                   5

Philippines                              $ 39.20                  10

For Korea, Taiwan and the Philippines, the U.S. has al­most phased out its economic assistance program. These na­tions are approaching the point where their economic infrastructure should allow them to self-propel their economies. Yet the amount of per capita assistance given them as compared to the world’s largest struggling democracy is strikingly ob­vious.

The reason for the difference is not solely our policy. In 1945 we were engrossed with containing communism and gen­erous amounts of foreign aid was one of our weapons. India was engrossed with the neutralist ideal directed by the char­ismatic shadow of a Ghandi. Therefore the discrepancies in relative aid receipts to various nations, and possibly a signif­icant reason for difference in economic development 20 years later.

Money means capital investment, this means more facto­ries, which means more jobs, which means that kid in the chawls may land a job rather than idle in his family’s one room or on the street corner. In India, one facet of America’s aid is to pump money creating investment into the hands of the frustrated middle class father and  by doing so aid the chawl kids’ needs also.

The program works something like this. America has supplied India with tremendous amounts of grain in the last few years (11 billion tons last year). Due to India’s preca­rious foreign exchange condition she has allowed her to re­pay in rupees. America can not use the rupees anywhere but in India. So she lends 80 per cent of it back to private entre­preneurs in India. The other 20 per cent is used for the admin­istrative costs of our governmental personnel in India.

Nevertheless the amount of rupees owed the U.S. is stag­gering. Thus Indian government officials often criticize this “Public Law 480” program as “foreign domination of our economy.”

A similar view would probably be espoused by intellectuals here at home who see exploitive motives in most of our giving. In India, the criticism comes from those who feel that either complete centralized planning and/or complete Indian government control over all economic aid allotments is the answer.

The Agency for International Development (AID) position is that private entrepreneurs and their initiative and profit motives are a needed part of the answer, not merely centralized planning. They also feel that over this double loan — which America never really expects to collect – they should have some authority. They also point out that the Indian government has control over the distribution of this money by their process of licensing, which the capital seeker must pass through to gain AID grants.

Indian criticism of this PL 480 process, for some of her above reasons, may be part of the answer as to why the rupee repayment is presently being phased out. The U.S. government, by 1971, may demand that all repayment be in dollars.

Bombay is India’s most booming city. Industry and construction is going on constantly and everywhere. Calcutta used to be in this position. But she has reached her physical limit. Also detracting from investment is the Bengali labor mentality of “gheraos” (strikes — sometimes violent), and general disrespect towards — or self-pride if you interpret it on the Bengal side — toward the Berah Sabh (Big Boss). There two areas are the only really commercial, finan­cial, and industrial centers in India. Therefore they are also the two major tax sources, supplying over 60 per cent of the tax revenue. (An 80 per cent peasant population averaging only 75 rupees a year is not a tax source). India’s progressive tax system, depending on whose stats you use, is either the highest or one of the highest in the world. So businessmen in either of these cities constantly gripe about the chunk the gov­ernment takes from them. Chunks which presumably could go for reinvestment. Even so, the tax system is not leveling the station of the very rich businessmen. Evasion and inefficient collection keeps these men living in the splendor of contem­porary maharajas.

There is a movement afoot in India which some feel is the answer to India’s problems — alas the world’s!  It is called Moral Rearmament and its title is self explanatory. If they were serious, these MRAs would concentrate their efforts on that rich class of businessmen from which many of their parents come. From among these select few there are not enough truly socially responsible individuals. Mr. Tata, the owner of Indian Airlines, Tata Oil and Steel and others, seems to he one of the few, as his wealth is seen spread in institutions to better the lot of those below; especially the Parsee community of which he is one. This lack of social re­sponsibility, which in many ways seems applicable to our af­fluent, middle class society, will lead into my last comments on a facet of human resource development.