Vol. 6 · pages 166–170

151 BUDGET BY SHARED REVENUES and charges were marked off from the rest and were shared between the Imperial and the Provincial in some definitely fixed proportion. The object of the arrangement was to replace rigidity in the Provincial revenues by elasticity. In the finances of the other Provinces there was elasticity in so far as their assignments were replaced by assigned sources of revenue. But to the degree in which their revenues were made up of fixed assignments their finances inevitably suffered from rigidity. In the case of Burma, however, the substitution of shares of growing revenues for fixed assignments gave complete elasticity to the Provincial revenues without which it had become so difficult to shoulder the responsibility of meeting expanding charges. In recasting the framework of the Provincial Budget of Burma on the principle of shared revenues, all the heads of receipts and charges were made wholly Provincial, with the exception of the following, which were treated as wholly Imperial :— (1) The Army ... ... Receipts and Charges. (2) Post Office ... ... ” ” ” (3) Telegraph ... ... ” ” ” (4) Account Department ... ” ” ” (5) Meteorological Department ... ” ” ” (6) Political ... ... ” ” ” (7) Remittance of Treasure and Premium on Bills of Exchange and unclaimed Bills of Exchange. ””” The third category of revenues and charges, namely, jointly Imperial and Provincial, covered the following items :— (1) Land Revenue, including capitation tax, but excluding Fisheries, with such Land Revenue Refunds, charges of collection and settlement as cannot be attributed to Fisheries only. (2) Forest revenue. Expenditure and Refunds. (3) Export Duty on rice, and Refunds. (4) Salt Revenue, Expenditure and Refunds. Items comprising the third category were divided between the Imperial and Provincial Governments in the proportion of fivesixths to the former and one-sixth to the latter. By adopting this method of supply Burma, unlike other provinces, secured funds of an elastic character, for, even though the shares remained fixed the amount they brought in in any one year varied with the variation in the total yield of the revenues assigned or shared. Of course everything depended upon how Burma nursed the revenues

152 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES delegated to its control. But if it did its duty, unlike the other provinces, its labours were not to be unrequited. The same principle of shared revenues was applied to the province of Assam, which had hitherto continued on the old basis of 1871. Although the settlement with that Province had been made after that with Burma had been carried out, the principle of shared revenues as a mode of balancing the Provincial Budget was not adopted on any appreciable scale. The reason for this break in the progressive realization of the principle is not to be attributed to any spirit of hesitation on the part of the Government of India, but is to be ascribed mainly to the necessity of the case. As it was contemplated to reincorporate the province into Bengal it was deemed expedient to frame the Provincial Budget of Assam on the same plan as that of Bengal so that their financial fusion might be as easy as the administrative. Thus the heads of revenue and expenditure which were provincial in Bengal since 1877 were also made provincial in Assam in 1879, including “Law Officers,” which for temporary reasons were reserved as Imperial in Bengal. The only point at which the new principle was applied consisted in making the Land Revenue head in Assam a joint head to be shared by the Imperial and the Provincial Governments in the proportion of four-fifths of its net yield to the former and one-fifth to the latter. 1 The beneficial results of the new settlement with these two Provinces are easily to be seen from the following comparative table of the estimates of their budgets as prepared on the old basis and as recast on the new :— 000 omitted Assam Budget Estimates Bt. Burma Budget Estimates Old Basis New Basis Old Basis New Basis 1878-9 1879-80 1878-9 1879-80 1878-9 1879-80 1878-9 1879-80 £££££ £££ Revenue ... 2115 2110 3657 3596 4013 4078 9459 9673 Expenditure ... 2253 2261 3480 3566 4169 5111 8926 10119 Surplus ... ... ... 177 30 ... ... 533 ... Deficit ... 138 151 ... ... 156 1033 ... 526 Closing Balance ... 206 55 521 555 873 161 1562 1436 From the Resolution of the Government of India in the Department of Finance and Commerce, No. 1249, dated March 13, 1879. 1 Finance Department Resolution No. 1598, dated April 17, 1879.

153 BUDGET BY SHARED REVENUES Once the new principle of shared revenues was established in the case of Burma and Assam it was not possible for the Government of India to withhold its application from the other Provinces. The settlements made in 1877 with the several Provinces were not only of short duration but were also of unequal durations. It was only in the case of Bengal and Bombay that the settlements were made for five years commencing from 1877-8. In the case of the Central Provinces and the Punjab the period fixed was three years, while in the case of the North-Western Provinces it was as short as two years, from 1877-8. It is evident from this that the settlements with some other Provinces were to have expired soon after those with Burma and Assam had been completed, and would have required to be reconstituted on the basis of shared revenues. The Government of India, however, delayed the process, and in that it did wisely, for it was too soon to make the new principle of shared revenues and charges a basis for universal application. It was nothing but prudent to have regarded it as it were in its experimental stage. Secondly, the disadvantages of the ex-parte treatment of the Provincial Budget had come to be realized. It then dawned upon the Government of India that the several provincial Budgets were only parts of an organic whole, viz., the Imperial Budget, and it was manifestly inadvisable to frame the Provincial Budgets each by itself without regard to the claims, needs and exigencies of all others. But in order that this comparative and compromising operation of judging the claims of one in the light of the needs of others be performed with the desired effect of treating the different provinces in an equitable manner, it was essential that all the Provincial Budgets be dealt with simultaneously. The importance of this consideration and the desire to gain time in order to profit by the experiences of Burma and Assam led the Government of India with the consent of the Provincial Governments to extend or shorten, as the case may be, the duration of their financial agreements with the Provinces so as to bring about a synchronous expiry of them all on March 31, 1882. Financial Settlements of 1882-3 The new settlements made with all the provinces with effect from 1882-31 were marked by an extension of the principle applied to Burma since 1878. Certain heads, as few in number as possible, of revenues and charges were wholly, or with minute local excep1 Resolution of the Government of India in the Department of finance and Commerce, No. 3353, dated September 13, 1881.

154 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES tions only, grouped as Imperial. Others were classed as wholly Provincial. The remaining were placed in an intermediate category designated as joint and were in most part shared equally between the Imperial and the Provincial Governments. In those cases, however, where the provincialized expenditure exceeded the resources from the provincialized as well as the shared revenues, the balance instead of being provided as heretofore by fixed assignments from the Imperial exchequer was rectified for each Province by a fixed percentage on its land revenue—a wholly Imperial head of revenue except in the case of Burma, where the percentage was extended to the Imperial rice export duty and salt revenue as well. Along with the enlargement of the scheme of Provincial Finance in 1882 the Government of India was also anxious to introduce simplicity and uniformity in the matter of grouping the different heads of revenue and expenditure under the three catgegories now established. It will be remembered that the agreements effected in 1877 were marked by diversity and intricacy. The same charges were not provincialized in all the Provinces. A charge which was Provincial in one was Imperial in another. Again, in transferring charges a grant was often broken up so that a part was made Provincial and a part reserved as Imperial. On the revenue side the arrangement was not a little intricate. The computations owing to the proviso in respect of the assigned revenues made the calculations far from simple. Both these defects were, however, removed when the settlements were framed in 1882, and it is to indicate what heads of revenue and expenditure were provincialized, what were imperialized, and what were divided and to what extent, that the following attempt is made. Revenues Imperial Provincial 1 Land Revenue The whole except as entered in the Provincial Column. In Burma, fisheries; in the N.W.P. and Oudh collections from the Terai, Bhabar and Dudhi Estates, Rents of Water-Mills and Stone Quarries; in Bombay, Rents of R e s u m e d S e r v i c e Lands and Service Commutations. In all Provinces, a fixed per-

155 BUDGET BY SHARED REVENUES Revenues—Contd. Imperial Provincial centage on the Imperial land revenue to cover the difference between Provincial Revenue and Provincial Expenditure. II Tributes The whole. Nil. III Forest Half. Half. IV Excise Do. Do. V Assessed Taxes Do. Do. VI Provincial Rates Nil. The whole. VII Customs All except as entered in the Provincial Column. All items other than Customs Duties; and, in Burma only, the same percentage on Export Duties as on the Land Revenue. VIII Salt All except as entered in the Provincial Column. All items other than Duty on Salt and sale of Salt; and, in Burma only, the same per centage on the salt Revenue as on the Land Revenue. IX Opium The whole. Nil. X Stamps Half. Half. XI Registration Do. Do. XIII Post Office Nil. The whole. XIV Minor Departments Do. Do. XVI Law and Justice Do. Do. XVII Police Do. Do. XVIII Marine As at present. As at present. XIX Education Nil. The whole. XX Medical Do. Do. XXI Stationery and Printing. Nil. The whole. XXII Interest All except as entered in the Provincial Column. Interest on Government securities (Provincial). XXIII Pensions Book transfers from the Military and Medical Funds and subscriptions to these Funds. The remainder. XXIV Miscellaneous Gain by Exchange on Imperial transactions, Premia on Bills and unclaimed Bills of Exchange. The remainder. XXV Railway As at present. Whatever is now provincial in each Province. XXVI Irrigation and Navigation. Do. Do. XXVII Other Public Works Receipts from Military Works. The remainder. XXXI Gain by Exchange on Transactions with London. The whole. Nil.