International Monetary Fund

Abstract

A mission sent by the International Monetary Fund to India, at the request of that government, to study monetary and financial problems arising from the Indian government's five-year development plan, said that $400 million would be needed to complete the program, according to a report released on February 7, 1954. The report indicated that this financing might be sought internally as well as through foreign assistance. The mission regarded the program, which was estimated to call for a total investment of $7 billion, as “essential to the well-being of the people of India and … important to the survival of democracy in Asia”. While grants-in-aid would have a better economic effect than borrowing to obtain the necessary foreign aid, the report noted, the Indian economy was sound and should be able to borrow abroad if need be. Among the special problems covered in the report was the unpredictability of an adequate food supply; the mission recommended that India conclude special arrangements with the United States, Canada and Australia for a supply of wheat to meet “any extraordinary future needs”. In presenting the report to the Indian Parliament, the Indian government welcomed the Fund's study but made it clear that it was not committed to its recommendations.