AID OF BRITAIN

Gisborne Herald, Volume LXVII, Issue 20185, 1 March 1940, Page 5

AID OF BRITAIN

INDIAN WAR FINANCE MILLIONS INVOLVED SPECIAL MEASURES PROPOSALS OUTLINED (Elfic. Tel. Copyright—United Press Assn.) (British Official Wireless.) Reed. noon. RUGBY, Feb. 29. Sir Hugh O’Neill, Under-Sccretary for India, told the House of Commons at question time: “It was announced on September 5 that Britain had agreed to recommend to Parliament assistance amounting to some £34,000,000 —a quarter of which was to be treated as a loan to India for five years—to meet the capital cost of the modernisation of the forces as recommended by the expert committee on Indian defence. It is Britain’s intention that this modernisation should be proceeded with during the war insofar as strategic priorities and considerations of supply permit. “In the conditions brought about by the war, Britain has reconsidered the whole field of financial arrangements with India in respect to defence expenditure.. The respective Governments propose that the Indian Budget should provide during the war for. first, the normal cost of India’s prewar forces, whether employed in or outside India, adjusted from time to time according to the trend of prices, and secondly, the cost of the special defence measures undertaken by India in Indian interests during the war. In addition, the contributions recommended ' by the Garron tribunal will be made towards the extra cost of certain troops while employed outside India, and defence expenditure over this amount incurred by the ’ Government of India will be met by the British Exchequer. “The annual grant in aid of military expenditure for India’s revenues, made in accordance with the recommendations of the Chatfield committee, will be continued and stabilised for the duration of the war at the 1939 level of £2,000,000.”