Vol. 6 · pages 201–205

186 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES in which we shall be presently engaged, we will learn that the necessity for these limitations arose from the very peculiar nature of Provincial Finance itself. On the other hand, it is important to anticipate this conclusion, and instead of producing the Rules seriatim as they occur, arrange them in such a way that they shall be an external register of the internal conception of Provincial Finance which particularly pervaded the minds of its promotors. For the consummation of this end, the labours of the officials in charge of Provincial Finance who have laid down these rules are of no avail. To them these rules were only instruments of financial control, and it did not therefore matter in what order they were grouped. On the other hand, to get at the conception behind these rules it is necessary to classify and group them according to the purposes they were calculated to subserve. But the cardinal point in the matter of classification lies in defining the likely purposes which the originators of such an interrelated scheme of Provincial Finance as obtained in India must have had in view. Without being at all dogmatic, it may be said that for a successful working of such a scheme rules would have to be laid down for the purposes of defining (1) the Administrative and (2) Financial Powers of the Provincial Government. Each of the two categories may be further subdivided for a clearer understanding of the nature of Provincial Finance. Thus the Rules relating to Administrative Powers may be further subdivided into those pertaining to (i) Services and (ii) Staff. Similarly the Rules defining the Financial Powers may be conveniently grouped under the following subsidiary categories : Those (i) of a general nature and those pertaining to (ii) Provincial revenues; (iii) Provincial Expenditure, (iv) Budget Sanction and (v) Audit and Account. Taking purpose as the fundamentum divisionis, the above categories may be supposed to exhaust the possible purposes that the framers of the scheme may be said to have had in mind. On the basis of these categories we may therefore proceed to reduce the amorphous mass of Rules into a digest which, it may be hoped, will be convenient and instructive at the same time. I. L IMITATIONS ON ADMINISTRATIVE POWERS (1) Rules of Inter-Provincial Services For regulating the inter-provincial or inter-departmental relations affected by the creation of separate budgets for the different

187 LIMITATIONS OF PROVINCIAL FINANCE Provinces, it was ordained that— (i) No inter-provincial adjustments were to be allowed. (ii) No service previously rendered to other Departments at the charge of the Department made over to the control of the Provincial Governments was to be abolished, and no service previously rendered to these departments at the charge of other departments was to be increased. (iii) No line of through communication was to be abandoned or allowed to fall out of repair. (2) Rules pertaining to Staff As to the staff engaged in the execution of the provincialized services the Provincial Governments were enjoined not to— (i) Create a permanent appointment or augment the pay and allowance of any appointment. Prior to 1912 this applied to appointments with a pay of Rs. 250 a month and above. 1 But after 1912 it applied only to appointments ordinarily held by a Gazetted Officer or by an officer of the Imperial Service as defined in Article 29-B of the Civil Service Regulations. 2 (ii) Create a temporary appointments or deputation for an Officer. Prior to 1912 this applied to appointments with a pay of Rs. 250 a month and above. 3 But after 1912 it applied to such of the appointments the remuneration of which exceeded Rs. 2,500 a month, or Rs. 800 a month, if the temporary appointment or deputation was expected to last for more than two years. 4 (iii) Abolish a permanent appointment or reduce the pay and allowances of such an appointment. This rule was in the beginning applied to such appointments the remuneration of which exceeded Rs. 250 a month. 5 After 1912 it was confined to such appointments as were held by Gazetted Civil Officers recruited in England or as were defined by Article 29-B of the Civil Service Regulations. 6 (iv) Grant to a Civil officer in Government employ or in receipt of a service pension. 1 Rule 4 (3) (a) of 1897. 4 Rule 10 (4) (a) of 1912. 2 Rule 10(1) of 1912. 5 Rule 4 (4) of 1897. 3 Rule 4 (3) (b) of 1897. 6 Rule 10 (3) of 1912.

188 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES (a) Land, except where the grant was made under the ordinary revenue rules of the Province concerned without involving any special concession in money or its equivalent beyond the fact that the grantee received the grant in preference to others. 1 or (b) An assignment of Land Revenue when the amount exceeded Rs. 600 a year, or the assignment, though within that amount was not limited to three lives and reduced by one-half on each succession. All grants as assignments of Land Revenue made by Provincial Governments to civil officers were to be confined to cases in which the services were of a very distinguished and exceptional character. 2 (v) Revise (a) permanent establishments which involved additional expenditure exceeding Rs. 50,000 a year; or (b) rates of substantive pay of any one branch of the service at a cost to that service alone of more than Rs. 25,000 a year, or ( c) the average pay of a service of which the maximum pay exceeded Rs. 500 a month and raise it above the average rate approved at the last revision of the service by the Secretary of State or the Government of India, or ( d) the local allowances as compensation for dearness of living or for increase of rents in any localty. 3 II. L IMITATIONS ON FINANCIAL POWERS (1) General Before actually detailing with the limitations on the financial powers of the Provincial Governments it is necessary to recall that the financial settlements made with the Provinces consisted in handing over to them certain heads of revenue and expenditure. From this accidental feature it is not to be supposed that the settlements were a collection of separate settlements for each head of revenue and expenditure incorporated into the Provincial Budget. To obviate such a construction by the Provincial Governments and the consequences thereof, it was ruled that— (1) The Provincial Governments were to understand that the funds assigned to them formed a consolidated grant for all the services en masse entrusted to their respective administration and that no claim could therefore lie against the Imperial 1Rule 10 (9) ( a) of 1912. 3 Rule 10 (6) of 1912. 2 Rule 10 (9) (b) of 1912.

189 LIMITATIONS OF PROVINCIAL FINANCE treasury on the ground that the actual cost of any service exceeded the amount at which it was estimated in the calculations of the consolidated grant. 1 (2) And they were not to make any extra demands on the Imperial treasury, but were bound to maintain from the funds given to them all the services entrusted to their management in a state of administrative efficiency. 2 With regard to the powers of the Provincial Governments concerning the custody of their funds it was ruled :— (3) That the funds allotted for their use were to be lodged in the Imperial treasury, and were not to be removed for investment or deposit elsewhere; nor were the provincial Governments competent to withdraw such money except for expenditure upon the public services. 3 (2) Revenue Rules Turning from the general limitations to those pertaining to the revenues of the provinces, it should be noted that they were required to maintain themselves within the funds allotted to them by the Central Government at each settlement. The provinces could not augment their resources beyond the yield due to their natural growth by any possible means, for it was provided that Provincial Governments were— (i) Not to impose any additional taxation or make any change in the existing system of revenue management. 4 (ii) Not to alter or augment within its area the rates of discount upon the retail of Stamps, Court Fee labels, and duties on spirits and drugs. 5 (iii) Not to raise for its own finances any loans in the open market.6 Powerless in the matter of augmenting their resources, the Provincial Governments were not free to will them away to any other authority subordinate to them. To guard against such eventualities it was ruled that Provincial Government were— 1 Rule 7 of 1877 and 14 of 1897. 2 Rule7 of 1877 and 14 of 1897. 3 Rule 1 (8) of 1877, 4 (11) of 1897, and 5 (6) of 1912. 4 Rule 1 (1) of 1877 and subsequent Resolutions. 5 Rule 1 (6) of 1877, also embodied in subsequent Resolutions. 6 Rule 5 (13) of 1912. It is surprising that the various resolutions on the subject of provincial Finance prior to 1912 do not contain this ruling, though it cannot be doubted that it has been in operation since the commencement of provincial Finance. In the absence of a specific ruling prior to 1912, attention may be invited to the Resolution reviewing the Financial Statement for 1879-80, where it is said “so long, therefore, as a Local Government does not incur debt (which is absolutely forbidden), there is etc., etc.” F. S. 1878, Calcutta, p. 5.

190 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES (iv) Not to alienate any item credited to the general revenues, Imperial or Provincial, so as to form an asset of a Local or Special Fund. This provision as regards the non-alienation of the resources of revenue made over to the provinces was a little relaxed by the Rules of 1912 so that it was permissible for them to assign to a local body or special fund, as defined in Article 33 of Civil Service Regulations, constituted by law, petty items of Wholly Provincial Revenue of a recurring character, not derived from the proceeds of general taxation and not yielding on an average more than Rs. 25,000 a year. 1 (v) Not to make grants, subventions or assignments from the funds at their disposal to Local or Municipal bodies so as to create a permanent charge on the revenues of India. This by no means prevented grants, subventions or assignments from being made to local or municipal bodies by the Provincial Governments from their funds although the Government of India had sounded to them a note of warning by declining to bind itself to continue the grants after the expiration of the settlements or to provide for them in the succeeding settlements. 2 By the Rules of 1912, however, the power of making such grants was more clearly circumscribed so that a Provincial Government could not make (1) recurring grants to local bodies from provincial revenues exceeding Rs. 1,00,000 a year in any one case, 3 or (2) non-recurring grants to local bodies exceeding Rs. 10,00,000 in any one case, 4 or (3) a grant to a charitable or religious institution other than educational, not being outside India, in excess of Rs. 10,000 , a year if recurring, and Rs. 50,000 if non-recurring. 5 (vi) Not to make any grants to non-official (1) on political considerations of (a) land, either free of revenue, or on favourable terms, or (b) of assignment of land revenue, if the value of the land or land revenue exceeded Rs. 1,000 a year;6 (2) on the consideration of injury to himself or to his family in the event of his death during or in consequence of service rendered to Government, or (3) on the 1 Rule 5 (5) of l912. 2 Rule 4 (10) of 1897. 3 Rule 10 (12) (a) of 1912. 4 Rule 10 (12) (b) of 1912. 5 Rule 10 (10) of 1912. 6 Rule 10 (7) of 1912.