India ‘Facing Worst Crisis Since War’

Press, Volume CV, Issue 30952, 7 January 1966, Page 10

India ‘Facing Worst Crisis Since War’

(N.Z. Press Association—Copyright > LONDON, January 6. India was now face to face with her most serious economic crisis since the war, said “The Times.”

I he threat for the next few months was that millions would be pushed to the verge of starvation, the newspaper’s financial and industrial editor said in a special article.

“The failure of the monsoon—the worst in living memory has already led to food rationing in areas where there may be just enough to go around. Elsewhere the coming months could bring the acutest shortage of rice and wheat and the worst famine since 1943.” To last year’s natural disasters several man-made ones had to be added: the political repercussions of the dispute with Pakistan led to suspension of United States aid and the withdrawal of moral support by Britain. “The economic results of

jthis series of blows are be- ' coming all too clear. “Parts of India must prepare for famine and starvation—industry is short of power because lack of water ■ ' not only ruins crops but also [ deprives the hydro-electric' i plants. “The hotels in Madras are having to cut down on both! ‘ food and electricity. AID WITHHELD “Imports of raw materials, j I components and spare parts, [ I cut to the bone because of! [the shortage of foreign ex-1 i change, are having to be re-1 stricted further because of I the absence of American aid.[ j “As a result industry is); ! working hand to mouth . . ■; i prospects are grim and in-)’ dustrialists even grimmer,” the article said.

I “To an official credit squeeze, intended to damp down inflation, have been added physical shortages that threaten to dampen production. "At present the problem is as much psychological as economic. “DEEPLY HURT” “India has been deeply hurt, as much by her apparent friends as by her plain enemies. “She has faced famine be[fore, and she has faced enemies before. “What she is finding difficult to accept is that what she regarded as partners in her economic attempt to reach self-sustaining growth have let her down—-for political motives, not economic.

“The consequences can be seen all over India. POLITICAL ANGER

“In Delhi there has been political anger, anger against the United States for doing what she always warned India that Russia would do—stopping aid overnight for political motives; and anger against themselves for getting India into such a reliant posture. “The result has been a growing determination to ‘go it alone,’ whatever the cost — and the cost can be, and inevitably must be, grievously high, both for the Government and the people.”