Self-sustaining economic growth remains a tantalizing and remote goal for the world's poor nations, whose populations comprise some seventy percent of all the world's people. Now halfway through its “Development Decade,” the UN has observed that a continuation of past development trends is not something that can be looked upon with favor. There has in fact been a large expansion in industrial production and in overhead capital facilities in these poor lands over the past decade or two.

In the underdeveloped countries—where live most of the world's people—the hope for economic progress now flames with great intensity. The new international capital facilities of the postwar period, the new programs for sharing modern science and technology, the new interest of wealthy lands in progress in the poor countries—all these present the latter with an opportunity to be rid of the poverty and squalor of their material existence. Their eyes naturally turn to the more developed countries for capital and technical knowledge, and for ideas.

The contemporary Indian scene is exciting. Of immediate relevance to the present article are two basic aspects of the evolving situation in India. First is the fact that there is in process, for anyone to see, a deliberate effort to raise living standards. The government of independent India articulated a framework for economic expansion almost a decade ago, at about the time that President Truman dramatically injected the problems of economic development in the arena of international affairs. Since then India has been proceeding with development activity more or less within this framework.

Of Some 45.5 billion dollars in aid which the United States has provided to foreign countries in the postwar period from July 1, 1945, through June 30, 1953, roughly 75 per cent is recorded as grant assistance, the remainder as assistance in the form of credits. Examination of the statistics in these two categories suggests that there really is a third category, in which some of the aid listed in each of the two might properly be put. Thus, transactions listed as “grants” have realized some repayments; others have been renegotiated into cash or credits. On the other hand, there are “loans” which are obviously part grants; other loans remain loans only because of our grants to the same country.