The day India Begged the USA for wheat:
The PL480 Story.
Washington ki galiyon hota hai Bharat ka neelam,
De dey ....
Although it repressed relative prices in the agricultural sector, P.L. 480 food aid had a substantial net infla tionary effect on the Indian economy.[17] New money was created as a result of the peculiarities of P.L. 480 financial procedures. The majority of P.L. 480 food shipments to India were executed in exchange for Indian rupee funds, which were to be accumulated in Indian banks and used to cover local U.S. government expenses (with the balance to be returned to the Indian government in the form of concessional loans and grants).
To make payments into the local U.S. government account, the Indian central bank in effect issued securities redeemable on demand to that U.S. account. Subsequent disbursements from the U.S. account (for loans or grants to the government of India, loans to private firms under a special U.S. program, or local U.S. government uses) were made by a "liquidizing" process whereby the special securities were first converted into Indian public debt; that debt was then purchased by the central bank and finally passed on to the U.S. account as newly created money. The U.S. account, in turn, disbursed that money to the Indian public sector as loans and grants. One prominent scholar of the Indian economy, B. R. Shenoy, has estimated that deficit financing (the use of newly created moneys to finance budget disbursements) due to P.L. 480 operations accounted for as much as 35 percent o
The day India Begged the USA for wheat:
To the average American the symbolic image of India is still that of the half-clad fakir supplicating uncle Sam's largesse with a beggar bowl.
www.indiatoday.in
swallowing the humiliation.
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India begging. Indira Gandhi goes to the USA with a begging bowl.