Following receipt of your memorandum 439 of 15th September (file 2011/1),1 I have discussed the whole question of the supply of technical equipment to India with officials of the Ministry of Finance (Department of Economic Affairs) which, as you know, is the body responsible for Colombo Plan matters in the Government of India.
2. I pointed out the difficulties which we are experiencing in Australia in ascertaining the availability of ill-specified items of equipment, and our desire not to dissipate the funds allocated for the supply of equipment on less essential items. The Indians completely agreed with these observations and have shown a most co-operative response to the proposals outlined in your memorandum under reference.
3. They have agreed, firstly, to make formal and official requests for the equipment they would like us to supply under the scheme. They pointed out, incidentally, that their failure to do so previously was occasioned by the fact that no formal offer had been made by us. The lists of equipment had merely been sent along on the recommendation of Mr. T.K. Critchley in order to 'see what was available'.
4. Secondly, the lists forwarded from India will be sufficiently comprehensive on their details to give the Australian authorities an exact idea of what is required.
5. Again, the Indians admitted that items on some of the lists could be regarded in no way as essential and that there were items which India herself could possibly supply just as readily. They quite agreed that the allocation of priorities is essential if the best results are to be obtained from the Scheme. In order to guide Australia in her allocation of funds, they have promised to revise lists previously submitted and to examine all lists submitted in the future on the following basis:—
(a) Preliminary screening of all lists in the Ministry of Finance, the elimination of some items if necessary, and a tentative allocation of priorities, both of lists and within lists.
(b) Submission of the lists to an inter-Ministerial Committee for consideration of the priorities.
(c)Final approval by the National Planning Commission, following which a formal application will be made according to priorities 1, 2 and 3.
6. The Ministry of Finance has offered to consult with this High Commission at each stage of the proceedings. It has warned, however, that there may be a delay of from 4 to 6 weeks before lists so arranged will start to come through.
7. The Indians mentioned that it would facilitate their assessment of priorities if they could be informed of the total amount which Australia has allocated for the supply of equipment, and I would appreciate your further advice when you are in a position to announce this.
8. The system proposed will, I feel, meet the difficulties you have outlined. Formal requests will now be made for equipment; the lists will be as comprehensive as possible; they will have been approved by the Government of India and priorities will have been established by the National Planning Commission after taking into consideration the needs of the whole of India, not only those of the various departments or institutions concerned.
[NAA: A462, 587/7 part 1]