File 1262/1915 Pt 2 'Persia: Financial assistance: The Moratorium' [‎329r] (421/424)

The Capital for carrying out this programme in J 915-16 was to be
raised by the issue of a Rupee Loan of 3,000,000L and two loans to be
issued in England by Indian Railways for 3,500,000Z. and 3,000,000Z.
respectively. The Rupee Loan and the former of the two loans in
England by Indian Railway Companies have been issued. With regard
to the possibility of issuing any further loan in England this year or
next, or obtaining advances from the Treasury, the Secretary of State has
been in active correspondence with the Government of India and also
with the Guaranteed Railway Companies through whose agency An office of the East India Company and, later, of the British Raj, headed by an agent. a large
part of Indian capital expenditure is incurred. He has informed the
Government of India of the Conference at the Treasury on 19th August
when the scheme for advances by the Treasury for.the most urgent capital
requirements of the Dominions and India was explained by the Chancellor
of the Exchequer | and has asked them to coniine within the narrowest
possible limits their capital programme for 1916-17. He has also informed
them of the impossibility of obtaining in 1915-16 the whole of the additional
3.000,000L needed to complete the loan programme set forth in their
Budget, and has asked them on this account to exercise the most rigid
economy in all expenditure. He has also impressed the need of rigid
economy on Indian railway companies. A special procedure has been
brought into force to secure the effectiveness of these admonitions.
The^present estimate of the capital requirements of India in 1915-16 and
1916-17, as revised in the spirit indicated in the preceding paragraph, is
now as follows :—
(L) 1915-16. It is hoped that a sum of about 1,000,0001 (in place of the
loan of 3,000,000/. entered in the Budget) will now suffice to
enable the Secretary of State and the Government of India to pay
their way to the end of 1915-16.
(-•) 1916-17. If the programme of capital expenditure in 1916-17 is
cut down to—
£
Railways (for open line works and works in
progress) - - - - 4,000,000
Irrigation (for progress with works now in
hand) - - - - 1,000,000
Outlay on New Delhi - - - 267,000
5,267,000
and if a Rupee Loan of 4,000,0007. (an unprecedented amount) is issued in
India, it is expected that the capital required to be obtained from the United
Kingdom for 1916-17 will be 1,400,0007.—provided that the Savings Bank
deposits are of the amount now hoped for, that the yield of such additional
taxation as is imposed in the coming Budget suffices to prevent a deficit on
revenue account, and that no untoward events in other directions upset the
present estimates. Some allowance must clearly be made for any possible
failure of events to conform to these assumptions.
In order that commitments for 1915-16 maybe met and provision on
the modest scale shown above may be made for 1916-17, the Secretary of
State would be grateful if the Treasury would place at his disposal, to be
drawn upon if and when necessity arises, up to 31st March 1917 a credit
of 3,000,0007., to be used- ’
1.
3 .
r lo cover such cash deficit in 1915-16 (estimated above at not more
than 1,000,0007. net) as may result from the abandonment of the
loan of 3,000,0007. proposed in the Budget.
Towards carrying out the programme of capital expenditure for
1916-17 outlined above.
As a reserve against the unforeseen, in place of the public loan
which would in ordinary times be the resource of the Secretary of
State in an emergency.