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Vol. 6 · pages 241–245

The Evolution of Provincial Finance in British India; The Problem of the Rupee; other economic writings

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226 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES hardly be possible to deny this characteristic to the Indian constitution, for the provision of the constitutional law has since then been that the additional (i.e. the Legislative) members and the ordinary (i.e. the Executive) members shall together form the Legislature for the making of the laws and regulation for the peace, order and good government of British India.1 But judged in the light of its de facto consequences the Indian system falls lamentably below the de jure connotation of the class of governmental systems to which it belonged. If in other countries the record of Parliamentary government is one of submission of the Executive to the Legislature, in India it had been one of the Executive thwarting, often of flouting, the legislature. In vain may one search the proceedings of the Legislature to find the Executive ever paying deference to the wishes of the people. 2 Reforms have been incessantly, asked for by the legislature only to be denied with equal tenacity by the Executive. The reason why the Indian parliamentary system was but an empty form is to be found in the fact that it was a Parliamentary system without a Parliamentary Executive. In other words, the Executive under the system was not responsible to the legislature and was not removable by it. The Indian Legislature could neither make nor unmake the Indian Executive. The Indian Executive made peace or war as it liked without being afraid of dismissal by the Legislature. It taxed as it pleased and spent as it liked, without the slightest compunction as to the wishes of the Legislature, it undertook acts or refused to undertake them according to its own sweet will, but had no fear of a vote of censure from the legislature. The nearest approach to the Indian 1 Cf. the important note by that eminent lawyer Sir Bhashyam Iyengar on the Reform proposals of Lord Minto in 1908. 2.The following table from N. C. Kelkar’s The Case for Indian Home Rule, p. 81, is illustrative of the fact:— Legislative Council No. of Resolutions moved No. of Resolutions withdrawn No. of Resolutions rejected No. of Resolutions accepted Supreme … 3 2 1 0 Madras … 32 26 6 0 Bengal … 38 26 12 0 U. P. … 22 10 12 0 Bihar and Orissa … 5 5 0 0 C.P. … 4 2 2 0

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227 THE NECESSITY FOR A CHANGE system of parliamentary Government is to be found in the position of the Irish Parliament which existed from 1782 to 1800. The peculiarity of the case lay mainly in the fact that while this Irish Parliament, commonly known as Grattan’s Parliament, was during the period it lasted admittedly a sovereign Legislature, the Irish Executive of the time was as regards the Irish Parliament in no sense a Parliamentary Executive. The Irish Executive, instead of being appointed and dismissed by the Irish Legislature, was in reality appointed and dismissed by the Crown on the advice of the English Ministry. In the same manner the Indian Executive was appointed and dismissed by the Crown on the advice of the Secretary of State for India who is a member of the English Ministry and was in no way responsible to the Indian Legislature. It is true that the Executive in India was ultimately responsible to the Secretary of State for India and through him to the British Parliament. But it must not be forgotten, said Mr. Fisher, 1 that “the affairs of India are in the hands of the Government of India.... Proposals may come from the Indian Government to London and be vetoed by the Imperial Government. The large lines of Indian policy may be shaped by a Secretary of State in the India Office, and a powerful Secretary of State may make his influence felt strongly on the direction of Indian affairs if he encounters no serious opposition from the Government of India. But in reality the last word lies with the Indian official opinion (i.e. the Executive in India), that a measure would not be forced upon India against the united opposition of the Indian bureaucracy.” As a matter of fact neither was the Secretary, though all-powerful in Indian affairs, inclined to restrain the Executive in India from doing what the people regarded as evil nor to constrain it to do what he thought to be for the good of the people. 2 Hardly can it be said that the British Parliament, wherein every member 1 Fisher, H. A. L., on Imperial Administration in his The Empire and the Future, 1916, p. 58. 2 The only two cases in which the Secretary of State is known to have run counter to the wishes of the Executive in India were those concerning the Punjab Drainage and Canal Act and the Indian Tariff Act of 1875. The latter was obviously detrimental to the interests of India.

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228 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES has been supposed to be a member for India, has made the acts of the Indian Executive a matter of anxious scrutiny. 1 On the other hand, its interference in Indian affairs has on some occasion been positively harmful to the interests of the Indian people. 2 Indeed, there can be no doubt that the interest of Parliament in Indian affairs since the assumption of the Government of the country by the Crown instead of increasing has considerably diminished as compared with the interest it took when the affairs of the country were in charge of the Company. 3 Nay, the influence of the British Parliament over Indian affairs, it may be said, has undergone a decided change for the worse, 4 inasmuch as all its influence is exerted to strengthen the Executive in India against popular clamour rather than restraining it from flying in the face of public opinion. It is therefore evident that the control of the Secretary of State and of Parliament over the Executive in India was only a nominal control, and the Indian Executive was in reality an uncontrolled body of bureaucrats in the exclusive charge of Indian affairs. How was this trust discharged by this irresponsible Executive ? The answer to this question may be summed up in the statement that the Indian Executive has sacrificed progress to order. Whether we examine its actions in the field of legislation or finance, the truth of this statement becomes painfully evident. 1 The salary of the Secretary of State for India being paid out of the revenues of India, Parliament, had no occasion, as it had in the case of the Colonial Secretary, to annually review his actions in the full activity of the parliamentary Session. At the end, generally after the Appropriation Bill had been read a second time, the Indian Budget used to be submitted to Parliament which, after a somewhat desultory discussion, used to pass a Resolution proclaiming in solemn terms that the Indian Accounts show certain totals of income and expenditure ! Many attempts were made to improve the control of Parliament on Indian affairs. But Parliament never cared to increase its control. In 1873 Mr. R. N. Fowler moved “that in the opinion of this House it is desirable that the Statement of the financial affairs of India should be made at a period of the Sessions when it can be fully discussed.” Again in 1883 the same motion was brought forward by Mr. Fowler. Both of these attempts to furnish the House with a better opportunity to review Indian affairs fell to the ground. In 1899 the same Resolution was moved by Mr. Cladwell, M.P., with the addition that the Salary of the Secretary of State for India be placed on the British Estimates. It was opposed by Mr. Fowler, who was then the Secretary of State for India, and was in consequence lost. By the provision of the Government of India Act of 1919 the House has a better opportunity to criticize Indian affairs owing to the salary of the Secretary of State having been placed on the British Estimates. 2 Cf. the Resolutions of the House of Commons in 1877 and 1879 condemning the Indian Tariff policy in the interest of Lancashire. 3 In support of this may be cited the fact that Parliament never granted a lease of power without making harassing inquiries into the affairs of the East India Company. 4 Compare the Parliament which subjected the Indian Executive to the Judicature with the Parliament that has freed that Executive from Judicial and Legislative control. Compare the Parliament which laid stringent regulations on the Europeans in India with the Parliament which not only allowed them free ingress but kept them above the control of the Magistracy. Compare the Parliament which impeached Hastings with the Parliament which supported General Dyer.

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229 THE NECESSITY FOR A CHANGE There are very few countries in the world where there may be said to prevail so many social evils as has been the case in India. Law is a means by which society from time to time repairs its ills in order to effect its conservation. But with very few exceptions 1 the rule of personal law of a most pernicious character has been allowed to govern the social relations of the citizens, notwithstanding the fact that enlightened public opinion has long since raised its voice of protest against its perpetuation.2 So religious has been the regard of the Executive for the preservation of the personal law, notwithstanding the fact that it has disabled millions of its subjects from enjoying the most elementary rights of citizenship, that it has been careful not to allow in cases of conflict the rational provisions of the civil law to override or chasten the irrational rulings of that archaic code. 3 Judged by the modern standard of legislation the Executive must be pronounced to be extremely conservative. In the matter of securing economic rights its response was of a very halting character, and the legislation it has been persuaded to undertake for giving security or fixity of tenure to the agricultural 4 or ease and comfort to the industrial5 population sank in comparison to what it refused to undertake for liberating the rest from a species of industrial slavery notwithstanding incessant demands for its abolition. 6 Its financial system was similarly characterized by the desire to preserve peace and order by taxing the masses and exempting the classes. It has been urged that the revenue system be so altered as to give relief to the poorer classes. Indirect taxes are justified as a method of making the poorer classes pay their 1 Bengal Regulation of 1829 prohibiting Sati; Act V of 1843 (prohibiting slavery); XXI of 1850 (re enacting Sec. of Reg. VII of 1832) prohibiting forfeiture of rights or property as a result of loss of caste or religion ; XV of 1856 authorizing the remarriage of Hindu widows ; XXI of 1866 enabling native Converts to Christianity to obtain divorce ; XXVII of 1871 restricting unnatural practices ; III of 1872 providing a form of marriage for all persons who are neither Christians, Jews, Hindus, Mahomedans, Jains, nor Sikhs. 2. It was first accepted by Warren Hastings in 1772 and was embodied in the East India Company’s Act of 1780 (21 Geo. III, c. 70, ss. 17 and 18); the provisions have been incorporated in later Statutes. 3 Cf. the provisions in favour of the personal law in the Indian Succession Act X of 1865; the Transfer of Property Act IV of 1882, and the Indian Trust Act II of 1882. 4 Cf. The Tenancy Acts of 1859, 1868, 1881 and 1885 in Bengal; Oudh Rent Act of 1868 in U.P.; the Deccan Agriculturists Relief Act of 1879 in Bombay, and the Central Provinces Tenancy Act of 1883. 5 The Factory Acts did not begin in India till 1881. The Act of 1881 was amended in 1891 and replaced by another in 1911 which lays down the conditions governing factory labour in India. 6 Students of Indian economic problems will perceive that the reference is to the scandalous system of indentured labour.

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230 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES share of the burden of the State without their being sensible of the fact. But there is a limiting principle which forbids the imposition of certain kinds of indirect taxes. It may be said to be agreed by students of public finance that indirect taxes be such that the poor on whom they impinge rather heavily relatively speaking, must be able to adjust the burden of such taxes to their means. When such indirect taxes fall on luxuries it is possible for them to apportion for themselves the burden they need must bear by regulating their purchases. But in those cases where they fall on necessaries of life this elasticity is not possible. The pernicious character of the salt tax in India was urged as a sufficient ground for its elimination from the revenue system of India. But not only did the Executive refuse to accept the demand, it actually increased the salt tax whenever a deficit has occurred instead of tapping some other source of revenue, which it could have done with equal ease and greater justice. In 1886, to cite one example, it was admitted1 that “ There can, after all is said and done, be no manner of doubt, but that one great fact remains established, one great blot not only unremoved but aggravated by the course of events in recent years ..… It is that ..... the classes in (India) which derive the greatest security and benefit from the British Government are those who contribute the least towards it.” But in the Budget of 1887-8 the Executive eschewed its own conviction and inceased the salt duty to make up for the deficit caused not by any extraordinary measure of internal improvement but by an enormous act of external aggression, namely the conquest of Burma, as though the income tax of 1886 which left untouched the incomes of the Bengal zamindars, the Assam Tea planters and the Talukdars of Oudh, in making the richer classes pay, made them pay, at the very moderate rates it levied, all they could be made to pay. But the salt tax is not the only instance of inequity under which the masses paid for the classes. The land revenue as it has been levied in India may be cited as another example of inequity in the Indian Tax System. The sources of inequity are various. There is first of all the glaring fact that in some cases the amount of the tax 1 Cf. the speech by Sir A. Colvin on the License Tax Amendment Bill in the Supreme Legislative Council on January 4, 1886.