The increase in this currency circulation is
achieved by lodging sterling securities and issuing
rupee notes. On the 2nd of September, 1939, the ster-
ling securities were worth Rs. 59,50,11,000. In the
beginning of this year they stood at Rs. 1,120,32,89,000.
Inflation, therefore, is purposely introduced
in this country to lend money to Britain against
the growing pile of her LO.U.s. There is any
amount of talk about scaling down a substantial por-
tion of this debt but not a finger is raised against this
compulsion, to use the words of the recent manifesto
of Indian economists, 'on a poor famine-stricken coun-
try by lending through currency inflation large sums
to a country which is among the richest in the world.'
One would have naturally expected that the first
and foremost elementary anti-inflationary measure
would be to stop issuing rupee notes against LO.TI.S.
of Britain at a time when the debtor wants to
scale down his indebtedness by virtue of being in mili-
tary occupation of this country. But the Government
of India cannot do anything so obvious. The public
would very much like to know what the Indian Direc-
tors of the Reserve Bank have to say about what the
manifesto describes as "unjustifiable negligence of
India's legitimate interests."
INCREASING INDEBTEDNESS
The debt position of India is also a cruel comment-
ary on the way in which Britain has administered
India's finances. In 1858 the public debt of India was
£112 millions. By March 1937 it had risen to Rs. 1,208
crores. About 30 per cent of this debt was held out-
side India. Out of a total of Rs. 1199.7 crores, 483.1
crores were held in England, 485.87 in India. In addi-
30