Vol. 6 · pages 131–135

116 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES These would have been the total assignments to the Provincial Governments for meeting the charges on the incorporated services, had it not been for the fact that the Government of India desired to obtain relief by way of retrenchment of the provincial resources to make up for the deficits expected to follow the reduction in the income tax. The relief originally fixed at £1,000,000 was reduced to £350,000, distributed rateably among the various provinces. Taking account of these retrenchments the permanent assignments made to the provinces were as shown below:— Provinces Next Assignments Proportion of Retrenchment Permanent Assignments ££ £ Oudh ... 222,459 15,511 206,948 C.P. ... 280,846 19,583 261,263 Burma ... 275,332 19,199 275,332 Bengal ... 1,256,183 87,591 1,168,592 N.W.P. ... 688,822 48,030 640,792 Punjab ... 554,914 38,693 516,221 Madras ... 794,916 55,428 739,488 Bombay ... 946,040 65,965 880,075 Total ... ... 5,019,512 350,000 4,688,711 For conversion into Rupees, £1 equal to Rs. 10. Before the commencement of the time appointed to carry the scheme into practice the Government of India incorporated the following additional services1 into the Provincial Budgets :—The Charges for Petty Construction and Repair of Buildings in the Civil Department excepting the Opium Department in Bengal, the Salt Department outside the Lower Provinces of Bengal and Medical Services such as (1) Salaries of Medical Officers of Medical Colleges and Central Jails, and of Lunatic Asylums at the Presidency towns; (2) Extra allowance to Medical Officers for the Medical charge of Lunatic Asylums in the mofussil, and of Colleges, Central Jails, etc., also extra allowances to Medical Officers for the executive charge of jails, and (3) charges for subassistant Surgeons and Apothecaries employed in other than civil medical charge of the sudder stations or districts, and for all other subordinate medical establishments. Side by side with these transfers the Government of India withdrew the Calcutta 1 Finance Department Resolution No. 1659 of March 20, 1871.

117 BUDGET BY ASSIGNMENTS IMPERIAL ASSIGNMENTS FOR 1871—72 1 Oudh. C.P. Bt. Burma Bengal N.W.P. Punjab Madras Bombay Total Assignment as per Resolution of December 14,1870 ... £ 1,69,355 £ 205,271 £ 192,488 £ 1,176,406 £ 613,095 £ 463,727 £ 643,271 £ 707,693 £ 4,171,306 Add— Official Postage ... 1,551 5,093 ... 4,893 10,840 8,031 4,163 4,311 38,882 Transfer from Medical Services ... 2,139 1,767 745 6,649 5,624 2,828 7,597 8,500 35,849 Transfer of petty construction and repairs of Civil Buildings 699 1,778 420 6,508 2,555 1,908 1,050 4,050 18,968 Other items net ... ... ... ... ... ... 7,866 1,485 ... ... 4,600 13,753 633,599 4,278,758 Deduct— Transfer of Ajmere charges to Government of India ... ... ... ... ... 28,714 ... ... ... 28,714 Total ... 173,744 213,909 193,653 1,202,124 604,885 476,494 656,081 729,154 4,250,044 Deduct— Receipts per budget of 1870-1 ... ... 14,723 24,020 28,591 260,578 109,992 67,418 81,810 55,285 642,417 Net charge in Civil Department ... ... 159,021 189,889 165,062 941,546 494,893 409,076 574,271 673,869 3,607,627 Add budget grant for P. W. as per Res. of 14-12-1870, viz— Roads and miscellaneous public improvements ... 32,900 63,403 63,100 157,800 82,636 84,200 23,880 121,900 729,819 Civil Buildings ... ... ... ... 20,090 14,406 23,959 111,370 63,341 39,710 58,506 107,500 438,882 P.W. Establishments ... ... ... 13,777 20,230 22,635 69,984 37,954 32,217 47,421 49,644 303,862 Tools and Plants ... ... ... ... 1,060 1,556 1,741 5,383 2,920 2,478 3,648 4,588 23,374 Total public works ... 67,827 99,595 111,435 344,537 186,851 158,605 233,455 293,632 1,495,937 Grand total ... 226,848 289,484 276,497 1,286,083 681,744 567,681 807,726 967,501 5,103,564 Deduct— Proportion of £350,000 ... ... ... 15,557 19,853 ... 88,199 46,753 38,931 55,394 66,351 331,038 Revised permanent assignment ... ... ... 211,291 269,631 276,497 1,197,884 634,991 528,750 752,332 901,150 4,772,526 Or in round numbers ... ... ... 211,300 269,600 276,500 1,197,900 635,000 528,800 752,300 901,200 4,772,600 2Add—India ... ... ... ... ... ... ... ... ... ... ... ... 26,700 Total ... 4,799,300 1 Based on the Fin. Dept. Resolution No. 1660 of March 20,1871. 2 The item opposite to” India” in the above table is for the Calcutta University and for Prov. services (not including Public Wo rks) in Coorg, Ajmere and other district under immediate administration of the Government of India.—Sir Richard Temple’s Financial Stat ement for 1871-2.

118 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES University from the Provincial to the Imperial Budget. 1 To take account of the revision of charges for Official Postage,2 and Bengal Police,3 and the additions and withdrawals of services referred to above, the Imperial assignments to Provincial Governments for the year 1871-2 were further altered so that they stood as shown in the table on the preceding page.(Page 117) Besides these assignments for the fiscal year 1871-2, the Government of India gave the Local Governments a special donation of £200,000 in the year 1870-1 in order that they “may be able to inaugurate the plan successfully, and to have as it were a fair start.” Taking round numbers then, the several Provincial Governments had the following resources 4 at their disposal in the year 1871-2 to meet the expenditure incorporated in their budgets :— Provincial Budget for Resources Total Receipts surrendered by the Imperial Government Assignments from the Imperial Treasury £ ££ Oudh 14,700 211,300 226,000 Central Provinces 24,000 269,600 293,000 Burma 28,600 276,500 305,100 Bengal 264,800 1,197,900 1,462,700 N.W. Provinces 110,000 635,000 745,000 Punjab 67,400 528,800 596,200 Madras 81,890 752,300 834,100 Bombay 55,300 901,200 956,500 Having analysed the constitution of the Provincial Budgets and noted the receipts and charges incorporated into them, we will proceed to inquire into the peculiarity which marks their constitution as framed in 1870-1. No method of ascertaining this peculiarity would be more direct in its approach towards the question raised above than to ask ourselves what problem the framers of the Provincial Budgets were presented with and how it 1 Letter from the Secretary to the Government of India, Finance Department, No. 1683 dated March 21, 1871. 2 Finance Department Resolution No. 1659 of March 20, 1871. 3 Finance Department Resolution No. 1587 of March 20, 1871. 4 Financial Statement of 1871-2.

119 BUDGET BY ASSIGNMENTS was solved. From our knowledge of the history of the controversy that raged over the creation of Provincial Budgets we can say that what items of expenditure to incorporate into Provincial Budgets was no longer a prominent question of the time. Long since it was settled that there were charges in the Imperial Budget of a purely local character. By common consent they were regarded as the most unsatisfactory part of the Imperial Budget. It was admitted on all hands that, knowing nothing about these charges, the Government of India was either obliged to sanction an unnecessary charge which may have been carelessly endorsed by the head of a department having no immediate interest in guarding against the waste of public money, or by a too cautious spirit of a random parsimony, or by parsimony regulated only by the state of public revenue, refuse its sanction and check prudent and profitable expenditure. As either procedure was likely to cause mischief, it was commonly agreed that such matters over which the Central Government by its supreme ignorance was powerless to exercise any control, should be transferred from the direct purview of the Imperial Government to the immediate control and responsibility of the Provincial Government. One side of the problem had thus been solved by sheer force of circumstances. The matter on which all attention was mainly concentrated was the problem of providing the Provincial Governments with funds sufficient to meet the charges incorporated into their budgets. It was allowed on all hands to be reasonable that the receipts arising from the incorporated services should be appropriated by the Provincial Governments. Two good reasons were advanced for adopting such a procedure. It is laid down as a canon of good finance that tax administration and tax appropriation should go as far as possible together. On this principle it was but proper to have allowed the Provincial Governments to appropriate the receipts from the services which they administered. But there was also another weighty reason which influenced this decision. The main idea in the inauguration of Provincial Budgets was to interest the Provincial Governments in a judicious and economical management of the finances, and one way of sustaining their interest in the same was to have given them the receipts of the services they managed. The receipts, however, were so small a portion of the total funds necessary to meet the provincialized expenditure that the problem of balancing the Provincial Budgets remained unsolved notwithstanding. Two possible ways of solution were before the Government of India at the time : either to transfer for provincial uses

120 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES certain sources of Imperial revenue or to give a lump assignment from the Imperial treasury. It was difficult for a time to decide which was the more suitable of the two, for they were not only of unequal merits, but they made different appeals to the different parties concerned. To the Provincial Government assignment of revenues was preferable to fixed assignments as giving greater elasticity to their finances. To the Government of India, on the other hand, assignment of revenues seemed to be fraught with grave consequences. The past and the existing financial condition of India did not warrant the Central Government to alienate the sources of revenue it then possessed with equanimity and safety for the future. On the other hand, its prospective condition looked as precarious as its past, and it therefore desired to retain its control over the sources the mobilization of which alone could enable it to stave off any impending crisis. The second alternative, on the other hand, was just such a one as to give the provinces sufficient funds without the Government of India forfeiting its control over its resources. It must not be forgotten that the Government of India by reason of its constitutional position had the sole authority to manage and appropriate the revenues of India. Any solution for financing the provinces had therefore to be in accord with its interests as conceived by itself. This being the situation the method of assignments was adopted in preference to that of assigned revenues in solving the principal problem that arose in connection with the constitution of provincial budgets. It is because assignment of funds from the Imperial treasury was adopted as a method of supply to balance the Provincial Budgets that the system instituted in 1871-2 has been characterized in this study as a system of Budget by Assignments. This principle on which the Provincial Budgets were constructed in 1871-2 endured till 1876-7. The assignment made to the Provincial Governments for the year 1871 -2 had been declared to be fixed and recurring. Recurring they were, but fixed they were not; for, every year, since the start, the Government of India kept on adding to and withdrawing from Provincial Budgets items of charge already incorporated in them. In accordance with these modifications in the incorporated charges the Imperial assignments had to be either reduced or augmented as necessity dictated. The progressive changes in the assignments from 1871-2 to 1876-7 with the specific purposes for which they were granted are entered in the following tables :—