• CORRESPONDENCE
A LETTER FROM INDIA
[To the Editor of the SPECTATOR.] Si,—In the middle of this week I was discussing with an Indian friend—a business man and publicist, and one who has held high administrative office—the commercial relations between Britain and India. "You will see from this morning's paper," he remarked, "that Mr. Amery has been raising the issue we have often threshed out—the necessity of increasing the'.purchasing power of India, so that we may consume more high quality British goods."
True, that is a question I frequently talk out with my Indian friends. The Indian market is immense—when prices are low. But the Indian reacts more quickly than any other people against high prices ; when values are high, or higher than he thinks they ought to be, his wants are so few in this tropic clime that he does without. That is the real trouble with the textile trade where the Indian demand is of such great importance to Lancashire. Lord Emmot told the Oldham Chamber of Commerce that if India had taken in 1925 seventy-six per cent. of the cotton goods which she purchased in ,1913, the .Laucashire cotton mills could hal% worked seven to eight more hours a week. Why then did India reduce her purchases last year ?
It was not from any lack of purchasing power ; indeed I doubt if the purchasing power of the country was ever so great. Five successive favourable monsoons have brought great prosperity to the country. Exports have steadily expanded ; imports have not increased in corresponding ratio ; the trade balance in 1924 was very large—Rs 189 crores ; in 1925 it was much larger—Rs 180 crores. Where has this money gone ? It is hidden, in little hoards—small reserve stores of value in gold and silver, chiefly gold. The money has gone into hoards because the Indian has thought cotton cloth too dear. Instead of a new loin cloth every year, he has made his old rags last him two years. When he has bought, he has purchased more and more cheap Japanese cotton cloths instead of the better, though higher-priced, Lancashire goods. But the money is here ; there is an immense reserve buying power if it can be tempted out. It may come out now that cotton has fallen and cotton goods are cheaper ; but if Lancashire is not on the qui vise too large a share of this trade will go to the low-priced but attractive cloths of Japan.
The greater problem remains, so to raise the purchasing power of India that this vast market of 319 millions of people may be equal to high-class British goods. One useful step has been taken in the appointment of a Royal Commission on Indian Agriculture. The possibilities of Indian agriculture are a romance rather than a cold business calculatibn. As seventy per cent. of the people draw their sustenance from the soil,, nowhere in the world are results so vast. One scientific authority recently declared that modern methods of plant- breeding applied to wheat had increased the value of the crop by 220,000,000 a year. These methods are being applied to cotton, rice, jute and sugar cane. Arid lands in the Bombay Deccan which used to produce an uncertain crop worth 24 an acre now yield assured sugar cane worth 2100 an acre. The textile industry is the largest manufacturing enterprise in India. Take out the boom years and the profits on this industry are about 23,000,000 a year. But it has been cal- culated that the prevention of smut—an inexpensive and simple process—would raise the value of the millet crop in the Bombay Presidency by an equal amount. If we are aiming at the increased wealth of India, nothing promises such large or quick returns as agriculture.
Nevertheless those who understand the position feel grave doubts whether much will be done by so restricted a Com- mission as Lord Winterton foreshadows. The Indian agri- cultural problem is threefold. The most serious is that the educated and politically-minded classes are completely indifferent to agriculture, except as rent-takers. Educate an Indian and you make a non-agriculturist ; brains and capital are divorced from the land. The next problem is the Hindu law of inheritance, which, dividing the land amongst all the male heirs, not only reduces holdings below economic size, but leaves these tiny properties scattered over half a dozen fields. A sober calculation asserts that if holdings were consolidated in the ryotwari tracts the out-turn would be doubled without any additional capital or labour being put in the soil. Agricultural progress cannot be divorced from a reform of the land laws. Thirdly, there is the Government's revenue policy, with revision of the assessment every thirty years. Here the remedy is not a Permanent Settlement— that has been disastrous in Bengal—but a fixed settlement coupled with an agricultural income tax on profits from the land.
India cannot, however, live on agriculture alone, because too large a proportion of her soil is subject to years of rain failure. If her wealth is to increase, and her social advance to be stable, it is imperative that there shall be an outlet in manu- facturing industry for the surplus agricultural population. Let me give a personal experience. I toured the famine districts after the complete failure of the rains in 1899, when millions of stricken people flocked to the Government relief works. Ten years later there was an even more complete failure of the rains in the normally fertile country of Gujarat ; there was not an able-bodied man or woman in receipt of State aid—Athey were maintained by the textile mills of Ahmedabad.
Not for generations will the Indian craftsman compete with the British artisan in -precision work. But India can well furnish her own demand for rough work, and the increased purchasing power accruing from this will' so stimulate the demand for high-class goods that' the imports of British manufacture will be larger than ever. Here is an economic programme for Lord Irwin--develope Indian agriculture and • manufactures ; raise the purchasing Power cif -India ; arrange by preference that British goods have a fair• chance in this • Market- against sweated labour and depredated ' exchanges.
• India will flourish, and the British factories will - hum with
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