People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


Vol. XXX

No. 12

March 19, 2006

40 YEARS AGO

 

India- Most Indebted Developing Country

 

THE February 1966 issue of Westminister Bank Review has estimated that the total indebtedness of developing countries has increased from 8,000 million in 1962 to 11,700 million in 1964. The journal has further estimate that the service repayments on the total debt amounted to nearly ₤1250 million annually-over half the net aid-which the countries received in 1964.

 

The journal pointed out India as the most heavily indebted developing country. Discussing the question of repayment of the loans the journal noted, "Some countries with debts maturing in the next few years can repay them only by diverting funds from development plans and others cannot repay at all unless re-phasing is allowed so that repayment is postponed. But that is hardly solving the problem."

 

The journal has given comparative figures of external indebtedness of the developing countries only upto 1962. Yet it shows that the rate of increase in India's indebtedness is extremely high. Though in 1962 India topped the list, it was not so in 1955. the following data will prove this.

 

External Indebtedness

(In million pounds)

            Country                      1955               1962

            India                            110.6              1044.9

            Brazil                          492.7              838.9

            Argentina                    214.3              738.2

            Mexico                       171.0              485.7

            Turkey                        214.3              334.0

            Chile                           125.2              265.0

 

These figures do not include amount borrowed from the International Monetary Fund.

 

India's Declining Gold Output

Though the government is striving to mobilise hidden gold through the Gold Bond Scheme, it is actually neglecting the task of raising more gold from the mines. Consequently, the production of gold in India has gone down by about nineteen per cent during the last six years.

 

During 1961-62, India produced 136,498 ounces of gold while the Budget for 1966-67 shows the estimated production of 110,000 ounces. The government has not made any effort to explore new mines for the production of gold. At present it is extracted from the Kolar Gold Mines in Mysore State alone.

 

The total decline in gold output during the last six years is more than the gold raised under the Gold Bond Scheme so far.

 

India's declining old output is further adding to the foreign exchange difficulties.

 

Profiteering In Banking

The extent of profiteering in the banking industry can be very clearly seen from the financial operations of the Bank of India, the third biggest bank in the private sector.

 

This bank with a paid-up capital of Rs 4.1 crores controls a total deposit of Rs 240 crores. The total investments of the bank have reached Rs 59.3 crores. On Rs 4.1 crores as paid-up capital the Bank earned during 1965 a profit of Rs 103 crore. The rise of the banks profit since 1960 is as follows:

 

Year                Pre-tax profits

                        (Rs in lakhs)

1960                           60.0

1961                           94.3   

1962                           82.5   

1963                           93.0

1964                           100.8 

1965                           103.4

 

For the last three years, the bank has awarded 18 per cent dividend to the shareholders!

 

 

Rs 95 Lakhs For Consultation

An agreement was signed recently between Bharat Aluminium Co (BAICO), a public sector undertaking and Messrs. VAW, a West German "consultancy' firm for the implementation of the Koyna Aluminium Project which will produce 50,000 tons every years. Under the agreement VAW will assist BAICO in the planning, designing, construction and operation of the plant. The VAW will also supply its operating experience, "know-how" and its patent property. The fee to be paid by BAICO is eight million marks (approximately Rs 95 lakhs) and the agreement is vaild for a period of ten years.

 

--- People's Democracy, March 20, 1966