DEFENCE OF INDIA

Waikato Times, Volume 126, Issue 21051, 1 March 1940, Page 8

DEFENCE OF INDIA

HELP FROM BRITAIN MODERNISATION OF FORCES OUTLAY OF £34,000,000 (omcial Wireless) (Received March 1, 3.15 p.m.) RUGBY, Feb. 29 Sir Hugh O’Neill, Under-Secretary for India, told the House of Commons at question time:— “ It was announced on September 5 that Britain had agreed to recommend to Parliament that 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 of India, which had been recommended by an expert committee on India defence. It is Britain’s intention that this modernisation should be proceeded with during the war, insofar as the 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 the first normal cost of India’s pre-war forces, whether employed in or outside India, adjusted from time to time in accordance with the trend of prices, and, secondly, the cost of 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 the 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 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.” Vast Re-organisation A vast re-organisation of the Indian Army is envisaged in the AngloIndian agreement implementing the Chatfield Committee’s recommendations . The British Goverment originally agreed to grant £34,000,000 over five years. Now it has undertaken to bear all Indian defence expenditure except (1) the normal cost of India’s pre-war forces: (2) special wartime measures in the Indian interests, also a contribution towards the extra cost of troops employed outside India. The modernisation of the Army will proceed without delay. PROSPERITY OF INDIA INCREASE IN DEFENCE TAXES TO BE INCREASED (United Press Assn.—Elec. Tel. Copyright) (Received March 1, 3.15 p.m.) NEW DELHI, Feb. 29 The Finance Minister, in presenting a £69.000,000 Budget, explained that the defence expenditure had increased by £6.292,000 to £40.000,000. He announced a 50 per cent increase in sugar excise and a 20 per cent increase in the petrol tax. He declared that India is enjoying a tide of war prosperity, of which the primary cause was the foreign demand for India's goods.