Vol. 2 · pages 51–55

32 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES This of course is not a permanent reduction. It is indicated in the budget that there will be a total permanent reduction of something like 40 lakhs. That means that the rural population will still have to bear 3 crores of land revenue. The question I would ask the Finance Minister is this : if he is raising this tax of 1.69 lakhs from the city dwellers, why is he not wiping out the land revenue altogether ? Personally, I would be very glad indeed ; I will withdraw all my opposition to these taxation measures if he spends all this money on wiping out the land revenue. Is he doing that ? Why is he not doing that ? Now, Sir, there are just one or two points which I should like to touch upon. In this budget, the Honourable the Finance Minister seems to take credit for two things. One is, that after all he is levying all these taxes from the urban areas. The second is, that taking things by their total, there is no additional burden imposed, because what is levied by way of a new tax is remitted by prohibition and, therefore, on the total the sums are equal. Now, with regard to the first question, I should like to draw attention to some important figures. It has been my view, and that view is confirmed by such study as I have been able to make of the conditions of this province, that, so far as our province is concerned, agriculture is the most congested occupation. I am going to cite a few figures in support of that proposition. The first thing to be noticed is that Bombay is a small province in point of area. The total area of this province is 76,735 square miles ; which is really just one-half of the Madras Presidency, two-third of the Punjab, of the United Provinces and of the Central Provinces, and just a little less than Bihar and Orissa. Now, bearing this in mind, compare the area that is actually sown for purposes of cultivation, for raising food-crops. In Bombay, the total area that is sown is 32,801,971 acres. Now, as I said, although our province is small in area, the area actually sown in our province is just the same as that in Madras, a province which is twice as big as Bombay, and that in the United Provinces. It exceeds the areas sown in Bihar and Orissa and in the Central Provinces by about 8 million acres, and what is sown in the Punjab by about 6 million acres. My contention is that that shows that agriculture is the most congested industry in this presidency, that almost every inch of area which can be utilised has already been utilised, and that, therefore, there is no use driving people to agriculture. Take again a further comparison, that of the cultivable waste lands. In the United Provinces the cultivable waste land is 10 million acres ; in Madras, 13 million acres; in the Central Provinces, 14 million acres ; in the Punjab, 14 million acres ; and in Bombay it is only 6 million acres. Sir, that being the position, the view I take is—and I say this with full deliberation—that the salvation of this province and, if I may say so, the salvation of the whole of India lies in greater urbanisation : in reviving our towns, in building our industries, in removing as much population as we possibly can from our villages to the towns. What is there in villages ? After all, our village folks have no capital to run their agriculture in the

33ON BUDGET best way in which agriculture ought to be run. Population is increasing every decade, and land is being fragmented every time a man and heirs come on the spot. Everywhere the situation is as bad as one could conceive it. The only way by which you can increase the standard of living of the people in the villages is not to give them an antiquated machine like the charkha or to force them to weave cloth which they cannot sell in a competitive market. The way to increase the standard of living is not to destroy industries and other revenues of service in the towns and force them to go to villages. The way lies in the other direction, namely, in taking away as many people as you possibly can from the villages and bringing them to the towns, giving them employment in industries and establishing better ways of economic life. That is the way. Sir, I have no hesitation in saying that a man who is bent upon breaking up such little industry, such little urbanisation, as we possess is certainly no friend of the people ; if I may say so, I look upon him as an enemy of the people. Now, as regards the second point. My honourable friend says : “After all, what am I doing ? Am I adding anything to the total ? No. I am raising Rs. 1,69 lakhs, but I am also giving up 1,25 lakhs of the drink revenue and 40 lakhs of land revenue.” I do not know whether he is serious in taking credit for this. If he is, I would remind him of the potter who was given a certain amount of potter’s clay. Sir, if the potter instead of making a Ganapati made a monkey out of that clay, or instead of making a good elephant out of it made a donkey, would you say that the potter was a good potter, because he did not use more clay ? I wonder what would be the answer. This is nothing else but making a monkey out of the thing ; nothing else but that Therefore, Sir, in my judgment, as I said at the opening of my speech, this budget so far as taxation is concerned, is a reckless thing, and so far as expenditure is concerned, is a senseless thing. Sir, we all ought to realise that this presidency is the most highly taxed presidency. The per capita taxation in the provinces of British India is—these are not my figures; they are figures that I have taken from the speech my honourable friend the Finance Minister delivered last year :— Rs. Bihar and Orissa . . . . . . . . . 1.29 Bengal . . . . . . . . . 1.78 Assam . . . . . . . . . 2.26 Central Provinces . . . . . . . . . 2.72 United Provinces . . . . . . . . . 2.29 Punjab . . . . . . . . . 4.43 Madras . . . . . . . . . 3.26 Sind . . . . . . . . . 4.90 Bombay . . . . . . . . . 6.00 This alone will show that we are a very heavily taxed people. As a matter of fact our expenditure also is so regulated that we have really very little

34 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES to spend. We have really, as a matter of fact, very little margin for the purposes of our expenditure. Practically the cost of collection in this Province makes up 15 per cent. of our revenue; Superannuation is 10 per cent.; Interest takes away 10½ per cent; Law and Order including Justice, Police and Jails takes away 18 per cent of our revenue; and what little remains is spent on the other subjects which may be said to be subjects of public welfare. This is the position. In fact, it is a very tight corner : so far as the revenue is concerned, our capacity is less, and so far as our appropriations are concerned, many items are such that they really do not give us anything by way of public welfare. In a situation like this, I think it was but necessary that the Honourable Minister for Finance ought to have been more cautious than he has been. I am sorry to say that he has not. (Applause.) zz

5 *ON THE FINANCE ACT AMENDMENT BILL Dr. B. R. Ambedkar (Bombay City ): Mr. Speaker, Sir, having applied my mind to the Bill which has been moved by the Honourable the Finance Minister, I find that the Bill seeks to make three provisions. The first provision which the Bill seeks to make is to make the property tax a first charge; the second provision is with regard to the penalty in respect of the non-payment of the tax and the third is the retrospective character sought to be given to the penalty clause in this Bill. At the outset, I am glad to say that I find an occasion to congratulate the Honourable the Finance Minister on the declaration that he made in the course of his speech to which we have now listened, namely, that he would be prepared to accept an amendment in order to take away the retrospective character of the penalty. So far so good. With all that, it is not possible for me to pass from this point to other points in the Bill without expressing my sense of surprise that a Government which includes in it no less than five eminent lawyers should have thought it fit at the outset to bring in a Bill with a penalty which has got a retrospective character. I think it is a shocking thing. It should never have been brought in that form. However, dropping the matter aside, the two other provisions in the Bill which now call for attention are the two remaining ones, namely, whether the property tax should be made the first charge and whether there should be any penalty with regard to its non-payment. I will take the second point first with regard to the question of penalty. I think it would be desirable if I draw the attention of the House to one or two points connected with that aspect of the Bill. My learned friend would have noticed—he perhaps has not paid sufficient attention to it—that the Municipal Act itself makes no provision for imposing any penalty for nonpayment of the municipal part of the property tax. Section 200 of the City of Bombay Municipal Act provides that as soon as assessment is made, a bill shall be presented to the occupier who has to pay up the tax. Then section 202 provides that such a bill shall be met within 15 days from presentation. Then section 203 provides that if the bill is not paid within 15 days from the date of presentation, it shall be followed up with what is technically called notice of demand. Then section 203 says that if the amount due and mentioned in that notice of demand is not paid within 15 days, the municipality shall have certain rights for the recovery of the *B.L.A. Debates, Vol. VI, pp. 1033-37, dated 28th August 1939.

36 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES amount due. Now, under the Municipal Act, there are only two provisions included in it in order to enable the municipality to recover the amount of property tax from the person who has defaulted. The first step is to levy a distress upon the property of the defaulted. The second method permitted to the municipality is to file a regular suit in the ordinary way. But, so far as penalty is concerned, there is none whatever in the Municipal Act itself. Then, coming to other financial measures I proceed to mention the provision in the Income Tax Act. My honourable friend must have noticed that there is a certain kind of penalty provided under the Income Tax Act that might be levied on the persons who are defaulters. That is done under section 45 of that Act. That is a big section and I do not want to go into it. I can mention the gist of it by saying that the scheme included under section 45 for the purpose for a continuing default. That is to say, if you make a default for one day, you will have to pay a certain penalty, if you default for two days then a further amount of penalty. That is penalty in a progressive manner. The maximum of penalty mentioned here is the amount of the tax itself. The provision contained here is not a continuing penalty for a continuing default. Then, I come to the Bombay Land Revenue Code. The penalty is mentioned in section 148. There, the provision is merely this. If there is a person who is a defaulter in the sense that he has not paid his instalment within the period fixed, then the Collector shall either levy a penalty, or interest on the amount due. According to the rules, there is one authorising Government to make a rule in that behalf. Having gone through the rules made by the Government of Bombay under the Land Revenue. Code, I find that the Government have made no rules at all with regard to the levy of penalty or with regard to the charging of interest. There is a casual mention in the notice of demand itself which fixes the penalty at a maximum of one-fourth the amount due. Now, Sir, I readily admit that the principle of penalty is new but it is something which undoubtedly exists in many financial provisions. Now, the questions we have to consider are with regard to the manner in which it is prescribed and the amount of maximum penalty that is laid down. With regard to the other provisions of the Bill, the Honourable Minister has told us that they were merely consequential. Speaking for myself, I should have thought that they are the most contentious part of the Bill. If there is any provision in this Bill which makes me oppose it, it is really section 24B which my honourable friend seeks to introduce. First of all, let me deal with the arguments that this is merely consequential. Is it consequential or is it making the most radical, or if I may say so, revolutionary— The Honourable Mr. A. B. Latthe: I never said that it was consequential— Dr. B. R. Ambedkar: I withdraw— The Honourable Mr. A. B. Latthe: I said that it was for making the provision clear. Dr. B. R. Ambedkar: By trying to make the position clear, I have no doubt my Honourable friend the Minister has placed the Municipal Corporation of Bombay City in the issue. What is the position at which we