Money-Maxim Matrix
It took India comparatively less time after independence to comprehend the money-Maxim nexus. Immediately after independence India followed a free market economy - import licenses were distributed freely - that led to a foreign exchange crisis in 1957 - and then we liberalized more because we were forced to seek IMF and USAID. Since there are no free lunches, India had to pay a price – and the price probably was a war with China. The December 7, 1956 telegram from JS Cooper, the then US ambassador to India to the State department, explicitly stated, "Externally, India almost certainly faces readjustments of policies in which factors within its economy are compelling influences"¦Nehru, therefore, comes to Washington in a sensitive position of weakness. He and his advisers know that they have fumbled internationally, that UK no longer represents acceptable alternative leadership to US, and that they are in grave economic difficulties. (Latter point driven home during Nehru's holding finance portfolio this year plus recent indoctrination by planning commission.)" To complete the co-relation between money and geo-strategy, Cooper concluded in his telegrams, "We feel strongly that "moment of history" has arrived which if seized and exploited, can give US much firmer anti-Communist and anti-Red China counterpoise in India." This was also the time when Dalai Lama's brother, Thubten Norbu was actively working for CIA in Kalimpong( Nayantara Sahgal, Jawaharlal Nehru- Civilizing a Savage World, Penguin 2010).......
Debt ridden third world economies buy aircraft carriers
Incidentally, when India was reeling under a backbreaking foreign exchange crisis, the Indian government approved the acquisition of one light carrier in 1955, followed by another, if available, in 1957. So the first carrier that was named INS Vikrant arrived in 1961 from UK. The second, of course, had to wait till 1986 because the 1966 financial crisis and the concomitant devaluation had brought home the intricacies of dealing with the Bretton Wood twins-the IMF and the World Bank.
It is often argued that India could indulge and buy an aircraft carrier because of the Sterling balances that it had accumulated during WWII. 1957 was the time when USAID had began to issue policy directives to India stating that no economic aid would be available for the state-owned industrial and mining enterprises except in rare cases and the Second five year plan was being dubbed as 'over-ambitious' by the World Bank - it is strange that both the votaries of reduced deficit financing never asked India any questions on its aircraft carrier purchase. This important question never cropped up because the Bank's only concern was to protect British interests......
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