HT This Day: April 9, 1947 -- Indian currency to be independent
The Central Assembly today passed three important bills, one delinking the rupee from the sterling, another providing for production and marketing of rubber and a third giving protection to several industries as recommended by the Tariff Board.
The Central Assembly today passed three important bills, one delinking the rupee from the sterling, another providing for production and marketing of rubber and a third giving protection to several industries as recommended by the Tariff Board.
The Bill amending the Reserve Bank of India Act marks India’s achievement of financial independence even before political Independence. Moving consideration of the Bill which has been brought forward as a result of constant pressure from the Congress benches. Mr Liaquat Ali Khan, Finance Minister, described it as “the most important measure because it signalizes the emergence of the rupee as independent currency delinked from the sterling and as an international standard.”
The Finance Minister pointed out that the use of Sections 40 and 41 of the Act to finance British and Allied war expenditure in India had resulted in accretion of sterling balance and caused widespread agitation for the repeal of these sections. In future, the Reserve Bank would have the power not only to buy and sell sterling but other currencies as well.
The Finance Minister mentioned, however, that there was no intention, of India immediately going out of the sterling area since the question of sterling balances had yet to be settled
{{/usCountry}}The Finance Minister mentioned, however, that there was no intention, of India immediately going out of the sterling area since the question of sterling balances had yet to be settled
{{/usCountry}}Mr Manu Subedar declared that the country had been bled white by the misuse of powers under the Reserve Bank of India Act. Mr I. I. Chundrigar, Commerce Minister, nodded assent to this charge levelled against his predecessors. Mr Subedar recalled that for the past five years he had been agitating for the re- peal of these sections. He felt at the same time that it would not be all plain sailing for the Reserve Bank and enquired whether the bank was ready to assume responsibility that was being cast on it.
{{/usCountry}}Mr Manu Subedar declared that the country had been bled white by the misuse of powers under the Reserve Bank of India Act. Mr I. I. Chundrigar, Commerce Minister, nodded assent to this charge levelled against his predecessors. Mr Subedar recalled that for the past five years he had been agitating for the re- peal of these sections. He felt at the same time that it would not be all plain sailing for the Reserve Bank and enquired whether the bank was ready to assume responsibility that was being cast on it.
{{/usCountry}}Hoarding Of Gold
He thought that hoarding of gold was indicative of the lack of confidence in the country’s currency. The Finance Minister contested this view and declared that the chief reason was not lack of confidence in the currency but political unrest and un-certainty about the future.
Mr Ananthasayanam Ayyangar suggested that the country should go back to the gold standard. Mr Ambegaonkar of the Finance Department replying stated that as the various currencies would be convertible multilaterally it would not be necessary to revert to the gold standard. The Bill was passed amidst general satisfaction because in the words of Mr Ayyangar it was “a landmark in the history of the economic independence of India.”
Rubber Production Bill
Earlier, the House passed without much discussion Mr C. Rajagopalachari’s Rubber Production and Marketing Bill. The Select Committee had done its job so thoroughly that the House easily agreed to the Industries Minister’s motion for the Second and third readings of the Bill. Only one amendment was made at the instance of Mr Tamizuddin.
Mr Chundrigar’s omnibus Bill gives protection to a large number of industries such as sodium sulphate, hurricane lantern, bicycles, silk and silk manufactures, sugar and silver thread and imposes revenue duties on a number of articles such as wheat, cotton textiles and paper consequent on the withdrawal of protection from such articles.
Sugar Industry
The discussion on the Bill, however, centered round protection to the sugar industry. The Commerce Minister stood his ground and was able to prove his case that the industry needed the help the Bill was giving. The Bill was passed without any change.
A lot of useful information was elicited during question-hour. Mr Manu Subedar wanted to know whether the Government of India was buying three British cruisers which he repeatedly described as “old, damaged and ramshackle things”. While the Defence Secretary was trying to give cautious answers the Defence Minister arrived and stated that the Government had reopened the whole question whether these cruisers should be purchased or not. The House cheered this announcement.
