Vol. 6 · pages 151–155

136 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES It must be borne in mind that the total resources of the Provinces were made up under this system of (1) the receipts accruing from the incorporated services, (2) the yield of the revenues assigned, and (3) the adjusting assignment. How to fix upon an adjusting assignment for a particular Province was a question involving nice calculations. Before arriving at a definite figure for the adjusting assignments it was obviously necessary to have settled the normal yield of the receipts of incorporated services and of the revenues made over. The assessment of the normal yield was a contentious matter. As a rough and ready method the Government of India took the average yield of each over a series of years as the normal yield, and made it the basis from which to calculate the assignments. Similarly on the basis of the annual growth of the revenues in the past years it assumed a certain normal rate of increase for each of the sources, so that the normal for the succeeding years exceeded the normal for the preceding year at the normal rate of annual progression assumed. And as the normal yield of the assigned revenues increased at their assumed normal rate of growth the assignments fixed for the subsequent years diminished in like proportion. This normal rate of growth assumed for the assigned revenues was sometimes an assumption unjustified by their past productivity. At all events, as a higher rate of increase meant lessened assignments, the Provinces questioned its magnitude. To pacify the Provinces and to make due allowances for errors of estimating, the Government of India made a very ingenious concession. It agreed that if the actual results showed deviations from the estimated normal yield, either below or above, they should be equally divided between the provincial and Imperial Governments. If the actual yield was greater than the normal the adjusting assignment from the Imperial Government fixed for the year would be reduced by half the excess, and if it were less than the normal the assignment would be increased by half the deficit. All this very delicate mechanism was adopted primarily for the advantageous manner in which it enabled the Government of India to adjust the assignments without undue hardship being inflicted on either party. But there was also another advantage which, though unperceived at the time, was none the less effective. The consent secured from the Provinces to bear half the

137 BUDGET BY ASSIGNED REVENUES burden of a possible deficit in the normal estimate directly put a premium on economical and judicious administration of the ceded revenues. If the Government of India had agreed to bear the whole of the deficit below the estimated normal, it is doubtful whether the Provinces would have exerted themselves sufficiently to develop their resources to such a degree as to bring their yield to the level of the normal. But the fear that their obligation to bear half the deficit might assume a larger proportion, which would undoubtedly be the case if there was a great falling off in the revenue, compelled them to bestow greater vigilance than they would otherwise have done. Whilst an effectual check on relaxation was thus provided the scheme was not wanting in a stimulus to exertion. The prospect of gaining half the excess over the normal gave a more direct stimulus to the Provinces to develop their resources beyond the normal than would have been the case if the total excess had been entirely appropriated by the Imperial Government. In short, the deterrent effect of a deficit to bear and the stimulating effect of a gain to reap made the mechanism of Provincial Finance as perfect as it could be made from the standpoint of economy in expenditure and productiveness in resources. Having noted the factors that led to the conception and execution of this new step in Provincial Finance and the features which marked its novelty, we may now proceed to the study of the constitution of Provincial Budgets and the revenue and charges that were incorporated into them. Unfortunately it is impossible to present a conspectus of Provincial Budgets as a whole, for the charges were not uniformly incorporated in all the Provincial Budgets. Each Province was treated individually. This compels us to enter upon the analysis of the Provincial Budgets as they were reconstituted in 1877-8 separately for each of the different provinces. North-Western Provinces and Oudh 1 The budget of the Province was recast rather than enlarged by additions to the already allocated items, as was the case with regard to some other Provinces. In its new form the budget of the Province incorporated the following heads of expenditure and revenue:— 1 Financial Department Notification No. 1807, Gazette of India, Part I, March 31, 1877, p. 172.

138 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES HEADS OF CHARGES HEADS OF REVENUE 3. Refunds of all Assigned Revenues. 4. Land Revenue (excepting settlements, allowances to district and village officers, and Bahbar estates and I Land Revenue—collections from the Terai and special temporary compensations to covenanted civil servants in N.W.P.) the Dudi estate in Mirzapore and from slone quarries. 6. Excise IV Excise. 10. Stamps. IX Stamps. 14. Administration (excepting Account and and Currency Officers). 16. Law and Justice (excepting special temporary allowances to covenanted civil servants in N.W.P.) XIII Law and justice. 17. Police. XIV Police. 19. Education XVI Education. 21. Medical (excepting the pay of Medical Officers in charge of civil stations). 22. Stationery and Printing. 28. Miscellaneous (excepting remittance of treasure and any unenumerated item exceeding Rs. 10,000). XX Miscellaneous (excepting “Gain by Exchange,” “Premium on Bills,” unclaimed Bills and unenumerated items exceeding Rs. 10,000 each). Public Works Ordinary; Roads and miscellaneous public improvements, civil buildings (except opium, post office and telegraph buildings) and tools and plants; also whole of the Public Works establishment of the P.W.D. excepting that in the Military works and irrigation branches; the imperial government paying towards their cost 20 per cent on the outlay from the imperial funds and works and repairs executed by the establishment. Public Works Receipt such as appertained to the Public Works charges incorporated into the Provincial Budget. In assigning the heads of revenue the Government of India added the proviso that “the Governments of North-Western Provinces and Oudh must surrender to the Imperial treasury half of any sum by which the net revenue from Excise, Stamps, and Law and Justice (omitting Jails and Registration), deducting Refunds under these heads and the charges under 6, Excise and 10, Stamps, exceeded Rs. 83,75,000” and agreed to reimburse the province with a sum equal to half the deficit if the yield fell below the above sum. This adjustment was effected by operating upon the balances of the Province so that if the expenditure of the North-Western Provinces and Oudh upon the incorporated services exceeded the enumerated revenues plus any Provincial contribution in support of them by less than Rs. 83,75,000, the difference was to be added to; and if such excess expenditure was more than Rs. 83,75,000 the difference was to

139 BUDGET BY ASSIGNED REVENUES be deducted from the balances of the Government of the Northwestern Provinces and Oudh in the Imperial treasury. Bengal Items of Expenditure incorporated in the Bengal Budget Grant as existing in 1877-8 Retrenchment Proposed Consolidated Grant 3. Refunds of Revenue from Excise, Stamps, Law and Justice, and of Deposits. 4,91,000 ... 4,91,000 4. Land Revenue (Collectors, Deputy Commissioners, etc. Establishments and charges on account of Land Revenue Collections). 22,62,000 ... 22,62,000 6. Excise on spirits and drugs ... 2,92,000 ... 2,92,000 8. Customs ... 6,93,000 ... 6,93,000 9. Salt ... 39,000 ... 39,000 11. Stamps ... 2,38,000 ... 2,38,000 15. Administration (excepting Account Office, Allowances to Presidency Banks, Stationery Office at Presidency and stationery purchased in the country). 12,61,000 ... 12,61,000 16. Minor Departments (excepting meteorological and archaeological departments, census and gazeteers). 1,68,000 ... 1,68,000 17. Law and Justice (excepting Law Officers). 63,97,000 1,00,000 62,97,000 18. Marine ... 10,92,000 ... 10,92,000 23. Political (Govt. House Police Guard). 7,000 ... 7,000 26. Miscellaneous (excepting remittance of treasure). 25,000 ... 25,000 Stationery and Stamps ... 4,98,000 50,000 4,48,000 27. Provincial allotment as now existing 1,10,59,000 4,40,000 1,06,19,000 Maintenance of Bishop’s Palace, etc. 7,000 ... 7,000 Total ... 2,45,29,000 5,90,000 2,39,39,000 The budget of the Province of Bengal 1 was enlarged rather than recast by additions to the already incorporated heads of revenue and expenditure. For the second stage of the scheme the Government of Bengal was made responsible for the charges shown in the above table. 1 Gazette of India, Part I, March 31, 1877, p. 174.

140 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES To meet these charges the following revenues were handed over to Bengal for its use :— ASSIGNED REVENUES (ooo omitted) Heads of Revenue Estimated Yield in 1876-7 Estimated Yield at the assumed Rate of Growth 1877-8 1878-9 1879-80 1880-1 1881-2 Rs. Rs. Rs. Rs. Rs. Rs. IV Exercise in spirits and drugs 6,300 6,400 6,500 6,600 6,700 6,800 VI Customs (see, Customs Misc. and Warehouses and Wharf rents). 3,600 3,600 3,600 3,600 3,600 3,600 VII Salt (Rents of Warehouses, fines and forfeitures and misc.). 220 220 220 220 220 220 IX Stamps 10,300 10,575 10,850 11,125 11,400 11,675 XIII Law and Justice XIV Marine (pilotage receipts, registration and other fees and misc.). 1,091 1,084 1,084 1,084 1,084 1,084 XVI Misc. (all except premium on bills, unclaimed bills, and any unenumerated item exceeding Rs. 10,000). 771 792 792 792 792 792 Total ... ... 22,671 23,076 23,421 23,596 24,171 Complied from statements in the Gazette of India referred to above. But as the revenues assigned were not sufficient for meeting the incorporated charges transferred, after taking account of the excesses over normal to be paid to the Government of India, the Government agreed to make the following assignments from the Imperial treasury to the Government of Bengal:— Year Assignments Rs. 1877-78 ... ... ... 48,32,000 1878-79 ... ... ... 44,57,000 1879-80 ... ... ... 40,82,000 1880-81 ... ... ... 37,07,000 1881-82 ... ... ... 33,32,000