Vol. 6 · pages 176–180

161 BUDGET BY SHARED REVENUES In the revision of 1887-8 the decisive factor was the unsatisfactory position of the Imperial Finances already referred to. To improve its financial position the shares in the joint heads were altered so that each Local Government was allowed to appropriate three-fourths of the stamps and one-fourth of the excise revenue, and required to bear the expenditure under those heads in like proportion. The proportions of land revenue were also altered so that three-fourths of it was made Imperial, and one-fourth Provincial. But the needs of the Imperial treasury were so great that the Government of India even revised some of the heads of the other two categories, namely, Salt, Customs, Interest, Irrigation and Railways, to its own advantage. The details of the gain to the Imperial treasury are as given below :— Revenue Imperial Share Increased —Decreased Net Gain Land Revenue ... ... 437,500 Stamps (share reduced from ½ to ¼ ... ... —810,000 Excise (share increased from ½ to 3/4) ... ... 947,500 Salt revenue of Burma imperialized ... ... 5,000 Customs revenue of Burma imperialized ... ... 155,000 Assessed taxes—divided in moieties ... ... —290,000 215,000 State Railways gross earnings— Nagpur Chhattisgarh Patna-Gaya ... ... —310,000 Cawnpore-Achneyra Eastern Bengal, provincialized ... ... —540,000 Expenditure Increased —decreased Net Gain Land Revenue, entire provincialization of survey and settlement 145,000 Salt in Bombay imperialized ... ... —90,000 Customs in Bombay imperialized ... ... —50,000 State Railways— Working expenses:— Provincialized ... ... 305,000 395,000 Imperialized ... ... —215,000 Interest—Provincialized ... ... —70,000 Imperialized ... ... —65,000 Irrigation—Provincialised. Bengal ... ... 65,000 ” ” M a d r a s . . . . . . 2 3 0 , 0 0 0 Add—Small items of accounts unenumerated ... ... ... ... 20,000

162 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES This gain to the Imperial treasury was distributed in the following proportion among the various Provinces :— Provinces Increase of annual resources under the principal Provincial Heads of Revenue as estimated on comparison of 1882 and 1887 Amount by which Annual Provincial Resources were reduced by the Revision of 1887 Land Revenue Stamps and Excise Total £ ££ £ C.P. ... 2,200 45,500 47,700 15,600 Burma ... 4,700 9,200 13,000 ... Assam ... 22,300 21,300 43,600 24,600 Bengal ... 19,200 171,550 190,750 103,600 N.W.P. ... 8,000 130,150 138,150 100,000 Punjab ... 32,800 23,100 55,900 ... Madras ... 27,750 142,550 150,300 174,400 Bombay ... 99,000 198,550 297,550 221,900 Total ... 195,950 741,900 937,850 640,100 This would have been the net gain to the Imperial treasury had it not been for the fact that it conceded to Burma the sum of £ 10,000. The net gain was thus reduced to £ 530,100 per annum. The condition of Provincial Finance during the period of 1887-92 may be judged from the following table presenting the annual surplus and deficit of each of the different Provinces :— Province Annual Surpluses and Deficits 1887-8 1888-9 1889-90 1890-1 1891-2 Rs. Rs. Rs. Rs. Rs. C.P. ... 13,148 22,583 —12,322 —31,573 17,540 Burma ... 77,028 11,560 64,072 106,216 50,598 Assam ... 7,751 26,343 20,090 —17,871 31,185 Bengal ... 131,007 —65,792 102,547 —120,377 —11,934 N.W.P. & Oudh ... —53,900 45,949 102,710 —12,544 —4,399 Punjab ... 12,446 32,142 29,264 31,367 —1,719 Madras ... 105,371 113,932 144,571 —136,739 —241,770 Bombay ... —24,574 18,322 41,361 —123,887 —53,189 Compiled from the annual Finance and Revenue Accounts of the Government of India. Revision of 1892-3 The next revision of provincial settlements under the rule of quinquennial revisions occurred in 1892-3. The new settlements to commence from that year did not differ in principle from those

163 BUDGET BY SHARED REVENUES of 1887-8. The shares in the Joint Revenue were so readjusted as to give to the Imperial treasury a larger gain from the growing yield of the provincialized sources. The amount resumed by the Imperial Government at this revision through readjustments of shares was estimated as follows:— Province Increase of Revenue in 1891-2 (Revised Est.) as compared wih the Estimate for the Contract of 1887-8 to 1891-2 Amount resumed by the Government of India Rs. Rs. C.P. ... 119,200 22,700 Lower Burma ... 334,900 58,900 Bengal ... 517,700 51,900 N.W.P. & Oudh ... 53,300 56,900 Punjab ... 195,400 41,000 Madras ... 313,200 103,800 Bombay ... 399,200 131,100 Assam ... 99,800 ...... Total ... 2,042,700 466,300 But this gain to the Imperial treasury seriously disturbed the equilibrium between the expenditure of the Provinces estimated as normal for the ensuing period and the normal estimated yield of revenues left to them. To restore equilibrium between their normal expenditure and normal revenue the Government of India reverted to the discarded method of fixed adjusting assignments, so that while the actual revenues and charges deviated from what was estimated as normal for the period of the settlement, the adjusting entry allowed by the Imperial Government to each of the provinces remained fixed throughout the whole period. The following is a statement of estimated normal expenditure and revenues of the different Provinces with their respective adjusting assignments as fixed for the new period :— Provincial Revenues Provinces Ordinary Revenue being a share of certain Receipts Adjusting Assignments Total Provincial Expenditure Rs. Rs. Rs. Rs. C.P. ... 567,600 220,500 788,100 788,100 Lower Burma ... 1,427,500 414,300 1,841.800 1,841,800 Assam ... 657,700 —112,700 545,000 545,000 Bengal ... 4,249,300 —143,900 4,105,500 4,105,900 N.W.P. & Oudh ... 3,403,500 —250,000 3,152,900 3,152,900 Punjab ... 1,370,400 348,500 1,718,900 1,718,900 Madras ... 2,479,300 325,400 2,804,700 2,804,700 Bombay ... 3,123,900 771,400 3,895,300 3,895,300

164 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES The evil effect of large resumptions and fixed assignments will be clearly seen in the condition of Provincial Finance as indicated by the annual surpluses and deficits over the period of the settlement:— Province Annual Surpluses or Deficits 1892-3 1893-4 1894-5 18S5-6 1896-7 Rs. Rs. Rs. Rs. Rs. C.P. ... —21,798 —60,772 —105,108 19,653 —37,408* Burma ... 66,642 —90,653 —272,319 226,505 780 Assam ... 9,336 28,532 —27,422 30,507 —25,421 N.W.P. & Oudh ... —16,752 —25,155 —165,987 —139,798 —164,740 Bengal ... —9,826 36,887 169,796 149,808 —186,558 Punjab ... —106,050 —22,699 —24,811 —7,156 —64,073 Madras ... —159,081 33,636 92,328 44,118 —200,579 Bombay ... —23,883 19,443 —102,472 100,690 —221,119 * No closing balance left. Complied from the Annual Finance and Revenue Accounts of the Government of India. It must, however, be admitted that the financial arrangements of the Provinces during this period were considerably disturbed by the outbreak of plague and famine towards the close of the settlements. The expenditure which the Provinces were obliged to incur to meet these two calamities depleted the resources of all and brought the Central Provinces and the North-West Provinces to the verge of bankruptcy, from which they were rescued by the following contributions made by the Government of India in aid of their balances in the year 1896-7 :— To Central Provinces ... Rs. 526 lakhs. To N.W.P. and Oudh ... Rs. 1,609 lakhs. Revision of 1896-97 This depression in Provincial Finance was alleviated to some extent at least in the revised settlements of 1896-7 by allowing a higher standard of expenditure and of revenue to the Provinces than was granted to them in 1892. The following table presents the old and the new standard of expenditure with the percentage difference between them :— Provinces Standard Net Expenditure Increase per cent.1892 1897 Rs. Rs. Central provinces ... 653,300 710,700 8.8 Lower Burma ... 1,064,600 1,206,100 13.3 Assam ... 467,600 564,900 20.8 Bengal ... 2,816,700 3,125,500 10.9 N.W.P. ... 2,215,400 2,428,700 9.6 Punjab ... 1,384,600 1,537,300 11.0 Madras ... 2,054,800 2,238,600 8.9 Bombay ... 2,049,500 2,544,100 5.6 Total ... 13,066,500 14,355,900 9.9

165 BUDGET BY SHARED REVENUES This new and enhanced standard of expenditure called for a revision of the shares of the Imperial and Provincial Governments in the joint revenues. But the revision had to be so devised that while it gave larger resources to the Provinces it obviated the necessity of making fixed assignments as much as possible; for the Government of India had learnt to its cost that fixed assignments on a large scale tended to make the resource side of the Provincial Finance rigid to such an uncomfortable degree that, if the variability of expenditure surpassed the expansibility of the revenue incorporated in the Provincial Budgets, it was perforce obliged to distribute benefactions to ease what would otherwise be a difficult situation. Secondly, these fixed assignments also created a certain degree of inequality as between the backward and the more advanced Provinces. In the advanced Provinces the fixed assignments formed a comparatively smaller part of their resources than they did in the case of the relatively backward Provinces, and, as larger expenditure could be undertaken by the Provinces only when their revenues expanded, the advanced Provinces, a larger part of whose resources were of an expanding nature, obtained a more favourable treatment than the relatively backward Provinces, a large part of whose resources were of a frozen character. This was rightly conceived by the Government of India as the reverse of what ought to have been, having regard to the fact that the needs of the backward Provinces were relatively more imperious than those of the advanced Provinces. To obviate this injustice the Government of India enhanced the shares of the backward provinces in the joint revenues by reducing per contra the fixed assignments made at the last revision. To the Punjab it gave .4 and to the Central Provinces .5 of the Land Revenue instead of .25 only. The share of Burma in the Land Revenue was raised to .66, and to make provision for the enhanced expenditure due to the addition of Upper Burma, and in lieu of the railway revenue withdrawn from it, Burma was allowed to appropriate .5 of the Excise instead of .25 only. The financial condition of the North-Western Provinces was not very happy. Its revenue had proved so very unprogressive that it advanced only 2 per cent. between 1892 and 1897. The treatment of the North-Western Provinces at the revision of 1892 was also a little unjust. The revision had left its revenues short by 5 lakhs of its standard expenditure, to be made up by reduction of its balances. To make