Vol. 6 · pages 236–240

221 THE ENLARGEMENT OF ITS SCOPE competitive examination, at which natives of India, like other subjects of His Majesty, can compete; and (ii) The “Provincial” and “Subordinate” Civil Services, recruited in India, and, as a rule, only open to persons who are natives of the country or domiciled therein. Each Province has had its own separate “Provincial” and “Subordinate” Services, but while it has a free hand in recruiting for the latter, appointments to the former have been regulated by rules laid down by the Government of India. That being the case it would have been only logical that the Government which had the power of recruiting for an appointment should also have the power of regulating the salary. There can be no reason why the salaries of posts of similar grades should be equal in all Provinces; nor can they be equal having regard to the differences in the economic conditions of the Provinces. A Local Government knows better the economic value of a local man, and should therefore have been trusted with powers up to a limit covered by the Provincial and Subordinate Services. The suggestion of the Government of India that the grant of such powers would have resulted in heavy additions to the recurring expenditure of a Province must be said to be too ungracious to be taken seriously. The acceptance of the third recommendation could not have in any conceivable way affected the responsibility of the Government of India. The only objection which the Government of India urged was that such a separation would have been unwise. To have published accounts or estimates of the Imperial Government which excluded the accounts of the Provincial Governments, when the items excluded covered such a large magnitude, would have misled the public and rendered a wholly incomplete idea of the financial position of the Government of India. 1 Now it must be granted that if such a separation of accounts could have avoided the scrutiny and the consequent restraint on budget-making by the Provinces, not to have done so was to have put the supposed convenience of the student of Accounts above the administrative convenience of the Provincial Governments. Besides, it is to be pointed out that the sugestion was not a novel one. It was only a revival of the old practice which obtained between 1871 and 1877. During that period of financial decentralization Provincial figures did not apear in the Imperial 1 R.C.D., Mit. of Evid., Vol. X, Q. 44866, 45179-180.

222 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES Budget. The Provincial Budget as framed by the Accountant General was passed by the Provincial Government and no more reference was required to the Government of India except to inform it that the estimate was a probable one and that it was within the limits of the revenues assigned to the Province. It is therefore obvious that there could not have been any constitutional objection to the granting of the demand for a separation of accounts. The fourth recommendation was of the same class as the third, in that it too could not be said to have involved any infringement of the constitutional responsibilities of the Government of India. The abolition of the divided heads of revenue would have clearly eliminated the interference of the Government of India in the preparation of the Budget Estimates by the Provinces. Similarly the abolition of the divided heads of expenditure would have given the Provinces greater 1 freedom in the matter of spending the revenues assigned to them. Under that system a Provincial Government could not spend more on a particular service if it was a divided head unless the Government of India consented to increase its figure for expenditure under that service. If the Government of India reduced its figure the Provincial Government was perforce obliged to reduce its own. The substitution of a system of separation of sources and contributions from the yield for the system of divided heads would have clearly resulted in a greater freedom to the Provincial Governments, without any evil consequence to the Government of India. The objections which the Government of India was able to oppose to this demand was far from convincing. It was urged 2 that the Provincial Governments under complete separation may cease to take such interest as it took in respect of revenues which were divided. But it is evidently a mistaken view that a Provincial Government could not have been trusted to administer a tax efficiently unless it had a financial interest in the result. This view supposed that the people engaged in the collection of revenue really knew whether it went to the Imperial or the Provincial credit. As a matter of fact the ultimate credit could in no way have affected the collection of the revenue. And even if that view were true the 1 R.C.D., Mit of Evid., Vol. VIII, Q. 35225-28. 2 Ibid., Vol. IV. Q. 15100, 16791.

223 THE ENLARGEMENT OF ITS SCOPE difficulty could easily have been met by each government having its own staff to collect its own revenues. The employing by one Government to execute its functions the agencies of another, as has been the case in India, is obviously a complicated and awkward system. If separation of agencies had resulted from the separation of sources it would have been a reform all to the good. Besides it was overlooked that the fact that the divided heads gave a personal interest to the Provincial Governments was indeed a point against the system rather than in favour of it. A system which created a vested interest in a revenue apart from the interest of the public was a bad system, for such an interest was sure to lead to harshness and rigidity in collection.1 As an instance of this may be cited the notorious unwillingness of Provincial Governments in the matters of remitting taxation.2 If humanizing the Provincial Governments was a desirable end, then the abolition of divided heads was a good means. The other objection which the Government of India was able to oppose was that such a change would have given the share of the Government of India from the revenues raised in the provinces the character of a tribute, and the Government of India would have appeared to be the pensioner of the Provincial Governments, depending upon them rather than controlling them. This objection must be ruled out as being sentimental. The fifth and the last suggesion for the enlargement of the scope of Provincial Finance was least obnoxious to the responsibility of the Government of India. There is no reason why there should have been a single-treasury system for both the Governments, Provincial and Central. It is true that a common treasury permits a high state of economy in the cash balances of the country, which it is the duty of every Government to effect, just as any business firm looks upon it as its duty to economize its till money or floating cash. But if a common treasury hindered the use of the balances the gain in freedom would have more than compensated the loss involved by the increase in the cash balances that would have followed the institution of separate treasuries and separate ways and means. But the demand of the Provincial Governments did not ask for a complete separation of Provincial balances from the balances of the Central Govern1 Cf. in this connection The Fee System, by Prof. Urdhal. 2 R.C.D., Mit of Evid., Vol. X, Q. 44866.

224 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES ment involving separate treasury system and separate ways and means, probably because they anticipated that as such a proposal meant separate possession of provincial revenues the Government of India would raise a constitutional objection to such a demand. All they asked for was a power to spend part of their balances up to a defined amount without reference to the Government of India. The suggestion was accepted 1 as “reasonable,” for its consequences, provided it was not a big amount, would have been not a deprivation of the Government of India’s power of control over nor a disturbance in the ways and means, but only a slight increase in the cash balances of the country. Thus it is clear that the scope of Provincial Finance was unduly restricted by a too narrow and too legalistic an interpretation of the constitutional obligations of the Government of India. From the above analysis of the suggestions made by the Provincial Governments it is clear that without making any breach in the constitutional position of the Government of India it would have been possible, with a more charitable view of their sense of responsibility, to effect the changes they desired. Such concessions would have made Provincial Finance as self-sufficient and as autonomous as it was capable of being made. The system would no doubt have rested on pure convention: none the less its benefits would have been as real as though it was based on law. But the time had arrived when the financial arrangements could no longer be looked upon as a matter which concerned the Central and Provincial Governments. There arose a third party whose counsels were rejected in 1870 but which now insisted on having a voice in the disposition of the financial resources of the country. It was the Indian taxpayer, and his clamour had grown so strong that it compelled the powers that be to alter the system so as to permit him to take the part he claimed to play. The changes that followed upon this event will form the subject-matter of Part IV. zz 1 R.C.D., Mit of Evid., Vol. X, Q. 44900.

PART IV PROVINCIAL FINANCE UNDER THE GOVERNMENT OF INDIA ACT OF 1919 CHAPTER X THE NECESSITY FOR A CHANGE As two types of governmental systems, the Presidential and Parliamentary are often contrasted 1 to the advantage of the latter. For the Parliamentary type of government it has been claimed2 that no other arrangement seems able quite so effectively to place the centre of authority under the control of those who are supposed to represent the popular will : that it means government by consent: that it ensures the exercise of the functions of government by a body of persons who are amenable to and whose views are in accord with those of the majority of the Legislature : that it is the only form of government which provides for a powerful Executive so very necessary for a stable government without rendering it so irresponsible as to endanger the essentials of a good government: that it throws upon the holders of high office the onus of vindicating their acts or, failing, suffer dismissal: it renders the Legislature supreme both in legislation and administration so that it forms a government not only to make life possible but also to make life good. No other form of government, it is urged, can so effectively prevent order degenerating into tyranny or progress blocked in the name of peace. So eminently has Parliamentary Government demonstrated its supreme virtue in securing orderly progress that, though originally developed as an accident in the evolution of the British Constitution, it has been most eagerly adopted as the most fundamental institution by many countries whose political convulsions have required them to prepare anew or alter the existing framework of their governmental systems. If the fact of the Executive being a part of the Legislature be a sufficient indication of the Parliamentary type of government, then the system of government in India since 1853 may be said to be analogous to the Parliamentary system. Indeed it would 1 Cf. James Bryce, The American Commonwealth, 1910, Vol. I, Chap. XX. 2 Cf. Sir Sidney Low, The Goveranance of England, 1914, Ch. III, passim.