Vol. 6 · pages 171–175

156 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES Expenditure Imperial Provincial 1 Interest ... The whole except as e n t e r e d i n t h e Provincial Column. Interest on local Debenture Loans. 4½ per cent. on the capital cost to the commencement of the year, and 2½ per cent. on the capital cost during the year, of all Public Works, whether classified as Productive Public Works or not, of which Capital and Revenue Accounts are kept: excepting, always any portion of their cost supplied from the Provincial Revenues or by Local Debenture Loans. The rate of interest on the cost of Protective Public Works will be the subject of a special agreement. 2. Interest on Service Funds and other Accounts. Interest on Service Funds and deposits in Savings Banks. The remainder. 3. Refunds and Drawbacks Of the Imperial share of revenues. Of the Provincial share of revenues. 4. Land Revenues ... The same percentage on charges for collection of Land Revenue and on the cost of Surveys (including expenditure hitherto charged in the Accounts of the Central Government) and Settlements elsewhere than in Bombay and Madras, as is retained of Land Revenue. The remainder. 5. Forest ... Half. Half. 6. Excise ... Do. Do. 7. Assessed Taxes ... Do. Do. 8. Provincial Rates ... Nil. The whole. 9. Customs ... Do. Do. 10. Salt ... In Madras the whole. E l s e w h e r e t h e purchase and manufacture of salt; and in Bengal the cost of preventive lines and operations; in Bombay charges connected with the administration of Salt Revenue in Portuguese India. The remainder. 11. Opium ... The whole. Nil. 12. Stamps ... Half. Half. 13. Registration ... Half. Half. 15. Post Office ... Nil. The whole. 16. Telegraph ... Do. Do.

157 BUDGET BY SHARED REVENUES Expenditure—contd. Imperial Provincial 17 Administration ... Account and Currency Offices and allowances to Presidency Banks. The remainder. 18 Minor Depts ... A r c h a e o l o g i c a l a n d Meteorological Depts., Census, Gazetteers and Statistical Memoirs. The remainder. 19. Law and Justice ... Nil. The whole. 20. Police ... Frontier Police and Police employed on Imperial State Railways on Salt preventive duties. The remainder. 21. Marine ... Whatever is now Imperial. Whatever is now Provincial. 22. Education ... Do. Do. 23. Ecclesiastical ... The whole. Nil. 24. Medical ... Nil. The whole. 25. Stationery and Printing Stationery purchased for Central Stores. The remainder, including cost of stationery obtained from Central Stores. 26. Political ... The whole. Nil. 27. Allowances and Assignment. The whole except as in the Provincial Column. In Bombay, items now Provincial. 28. Civil Furlough and Absentee Allowances. The whole. Nil. 29. Superannuations ... Items not provided for in the A Provincial Column. pensions and gratuities, except pensions payable from the Military and Medical Funds brought to account in India; each Government being responsible for pensions and gratuities which it now pays, or hereafter grants or recommends, however earned and wherever paid. 30. Miscellaneous ... Remittance of treasure, and discount on Supply Bills. The remainder. 31. Famine Relief ... Secondary liability. Wholly Provincial. 32. Railways ... As at present. Whatever is now Provincial. 33. Irrigation ... Do. Do. 34. Other Public Works ... Military Public Works, and except in British Burma, Offices of the Supreme Government; Works in the Salt, Opium, Post Office, Imperial Telegraph and Ecclesiastical Depts. and Mint and Currency Offices; and Bengal Surveyor General’s Offices. The remainder. 38. Loss by Exchange ... The whole. Nil.

158 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES On the transactions of 1881-82 the Government expected to gain £ 470,000 a year. Of this sum, however, it returned to the Central Provinces £ 77,900, for improving the position of the subordinate civil services and other general purposes; to Madras, £ 20,000, for provincial public works; and to the N.W.P. and Oudh, £326,000, of which £ 10,000 was for additional Kanungoes in Oudh, and the remainder, £ 316,000, for a remission of local taxation. Besides these benefactions the Government of India gave for a favourable start to Bengal, £ 285,000; Burma, £20,000; N.W.P., £ 55,000, to be added to their balances before the close of the year 1881-2. These benefactions, which amounted to £ 496,000 a year, were expected to turn the annual gain of £ 470,000 into an annual loss of £ 26,000 to the Imperial exchequer. 1 In this connection it must also be recalled that the Government of India reimbursed the Provincial Governments of the amount of the benevolences it had levied on them in the years 1879-80 and 1880-1. But not long after the revision of 1882 the financial position of the Government of India, which had permitted of such a liberal treatment, suffered a reverse, and the necessity for levying benevolences on the balances of the Provincial governments reappeared in 1886-7. In presenting the financial Statement for that year the Finance Member of the Government of India argued :— “22. Since the estimates for 1885-6 were presented...... Indian administration and finance have entered on a new phase. The brief period of rest which the country had enjoyed since 1882 had drawn to a close...... By the events of the late years in Central Asia, India finds herself almost in contact with one of the great European Powers, and she cannot hope to escape the necessity which the position imposes on her of increasing her military strength. Events impending have occurred which have changed, as it was known they must change, the face of our estimates, and have thrust us violently out of the peaceful path of internal progress in which we had hoped to have been left undisturbed.” Among the other means employed to weather the storm the Government of India resorted a second time to nibbling at the provincial resources, and gathered a sum of £400,000 in the year 1886-7 by appropriating from their balances the above amount. 1 Financial Statement for 1882-83, p. 15.

159 BUDGET BY SHARED REVENUES The condition of Provincial Finance during this period may be summarized in the following table :— Provinces Annual Surpluses and Deficits1882-3 1883-4 1884-5 1885-6 1886-7 £ £ £ ££ C.P. ... 33,775 76,212 18,047 22,080 115,656 Burma ... 171,207 —90,030 —89,725* † 71,743‡ Assam ... 13,887 —5,216 —40,577 25,299 28,576 Bengal ... 539,611 146,027 48,910 26,777 52,911 N.W.P. & Oudh ... 281,222 357,630 —69,276 —180,060 —12,408 Punjab ... —110,966 —15,765 —41,545 42,447 3,106 Madras ... 108,421 10,820 —87,284 146,692 —78,689 Bombay ... —149,894 —2,585 6,006 291,976 —161,369 * No balance left at the close of the year. † Equilibrium. ‡ Balance obtained by excess of current revenue over current expenditure of the year. Compiled from the annual Finance and Revenue Accounts of the Government of India. The settlements entered into with the Provincial Governments in the year 1882-3 not only differed from the preceding settlements in the replacement of fixed assignments by shares in the Imperial revenues, but they also differed in another important respect, namely, their duration. Though the results of the scheme of provincial Finance have been presented in one Table covering the period 1871-7, it must not be supposed that the settlements with the various Provinces were made for the period of six years. On the other hand, the settlements were only annual and lasted up to 1877 by the process of constant renewals. The results have been presented together for a continuous period not because the setttlements were made for that period, but because the principle on which they were based endured for that period. After 1877 the settlements no doubt were made for a longer period. In two cases they were for five years and for the rest the period ranged between two and three years. The short duration system, like the fixed assignment system, was of immense advantage to the Imperial treasury. The object of these settlements, it will be recalled, was firstly to put a definite limit on the demands of the Provincial Governments on the already too scanty resources of the Imperial Government. Evidently this object would have been better served had the duration of the settlements been longer than it was. But a longer duration would have deprived the Imperial treasury of its right to profit by an early revision of the revenue side of the contract. It was this consideration of not remaining too long out of

160 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES pocket, that had hitherto prevailed upon the Government of India to shorten the duration of contracts as much as possible. But what was an advantage to the Imperial treasury was from the standpoint of the Provincial Government a serious drawback. Owing to the short durations of the settlements the Provincial Governments were not in a position to distribute the funds at their disposal on the incorporated services so as to open a new page in their financial history. They could not adopt a definite financial policy, for they feared that the new terms on renewal might compel them either to give up the policy or modify it so seriously as to prejudice its results. A single budget may seem nothing more than the conspectus of financial happennings of the year to which it pertains, yet to the financier who frames them year after year they embody a definite policy running towards its consummation. But a policy, however wisely adopted, may be thwarted by an unwise disturbance of the uniformity of conditions on which its fulfilment depends. This was just the flaw that deteriorated the sound working of Provincial Finance. Constant renewals had a general disturbing effect, and the duration between any two of them was indeed too short to give a stable state of conditions. Being impressed by the fact that the advantages of a short-duration-contract to the Imperial treasury were enormously counterbalanced by its disadvantages to Provincial Finance, the Government of India, on the occasion of revising the settlements in 1882-3, made it a definite rule that they shall be quinquennial in duration; that is, they shall not be subject to revision before the end of the fifth year from their commencement. Revision of 1887-8 By virtue of this rule the settlements made in 1882-3 expired in 1887. The revision then undertaken, as well as the subsequent ones, left as a rule undisturbed the two categories of revenue and expenditure, namely, those wholly Provincial and wholly Imperial. It became almost a convention to leave them as they were since the separation in 1882, when the constitution of Provincial Budgets was thoroughly overhauled and consolidated. The only heads of revenue and expenditure that were revised, as revision fell due, were those that were grouped under the third category, namely, jointly Imperial and Provincial, otherwise known as “Divided Heads.”