Vol. 6 · pages 266–270
The Evolution of Provincial Finance in British India; The Problem of the Rupee; other economic writings
This text was extracted automatically from the official PDF of Dr. Babasaheb Ambedkar: Writings and Speeches, so it may contain small errors. Always check the original page before quoting.
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THE NATURE OF THE CHANGE
a central control was inevitable. The Government of India could
not allow a Province to go bankrupt. But if the Government
of India were responsible for provincial solvency they must
be in a position to control provincial expenditure. Again, as
regards revenues, so long as the Government of India took a
share in the proceeds they had a strong motive not only in
interfering in the Budget estimates of the provinces, but also in
interfering in details of administration. Their interest in land
revenue, for example, inevitably led them to close supervision
over revenue settlements, and the control tended to become
tighter in cases where expansion and development of a source
of revenue, such as irrigation, depended on capital outlay.
The legislative powers of the Provincial Governments had in
the same manner been made subject to statutory restrictions.
There was no doubt an extensive field in which, so far as
the substantive provisions of the Statute were concerned,
the legislative competence of the provincial Legislatures was
legally unfettered. Actually, however, the power of the local
legislatures was curtailed in two ways. In the first place, owing
to the fact that in their existence all the Provincial Legislatures
were younger, and most of them much younger, institutions
than the Central Legislature of the Governor-General, a great
part of the field that would have otherwise been open to them
was covered by acts of that body, which had always retained
a concurrent power of legislation for the country at large.
But the field yet remaining open for Provincial Governments
in the matter of legislation was further restricted by the fact
that the power of the Secretary of State and Parliament to
control all-Indian legislation was made operative by means
of executive directions, which had made it incumbent on
Provincial Governments to submit for the previous sanction
of the Government of India and the Secretary of State all
their projects for legislation before introduction. It is true that
these directions did not apply to private members’ Bills ; but
inasmuch as a Bill could only be introduced with the leave
of the Legislature, and the Provincial Government was in
most cases in a position if it chose to do so to oppose such
a motion successfully, the Government of India by directions
to the Provincial Governments were in a position to control
all private provincial legislation almost as effectively as the
Provincial Government’s Bills.
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252 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
In carrying on the actual work of administration every
Provincial Government was by law required to obey the
orders of the Government of India and keep that Government
constantly and diligently informed of its proceedings and of
all matters which ought, in its opinion, to be reported to
that Government, or as to which that Government required
information. That was because in law every Provincial
Government was placed under the superintendence, direction
and control in all matters relating to the Government of its
Province. This administrative control of the Government of
India was exercised by that Government in the interest of
uniformity. It is obvious that in many respects India is one
single and undivided country, in which much work had to be
carried on on uniform lines. The Civil servants who executed
the orders of Provincial governments having been recruited
from England on terms guaranteed by the Secretary of State,
many questions affecting them could not be determined by
any Provincial Government. Again, the development of trade,
industry and science throughout India similarly favoured the
formulation and pursuit of uniform policies by the Government
of India. Even with one law for the whole of India business and
industry might have been left to their discretion to administer
such matters as statistics, patents, copyright, insurance, income
tax, explosives and mining, etc. Not only were the provincial
Governments subordinated to the Central Government to
follow established lines in the matters of administration,
but they were not free to initiate any new policy. It was the
Government of india which regarded itself as distinctly charged
with the duty of framing policy and inspiring reforms for the
whole of India by issuing new orders. To make them effective
these orders were often accompanied by handsome grants to
Provincial Governments strictly earmarked for the purpose
of pushing on some particular feature of the new policy. Not
seldom did the Government of India appoint new advising
or inspecting officers whose task it was to see that the new
energy suddently infused into the system was well maintained
and well directed to the chosen ends.
So long as the provincial Governments continued to be bound
by such strands to the Government of India there could be no
responsible government in the Provinces. No government can
be made to serve two masters at one and the same time. To
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THE NATURE OF THE CHANGE
keep the Provincial Governments subordinate to 1 the
Government of India and also to make them responsible to
popular Legislature would have been inconsistent in theory
and vicious in practice. It is quite conceivable that under
such a double government the wishes of the Provincial
Legislature on certain matters may not coincide with those
of the Government of India. On such occasions a Provincial
Government may not know whom to obey. If it deferred to
the wishes of the Legislature it would be failing in its duty
towards the Government of India. Indeed there is on record
a case of such a conflict. 2 There was an occasion during the
currency of the Morley-Minto Reforms when the Government
of Bombay were unsuccessful in their endeavours to persuade
the Government of India to sanction certain charges affecting
the educational staff. The proposals were locally popular and
were again put forward for adoption in a resolution moved in
the Bombay Legislature by an elected member. The Bombay
Government thereupon accepted the resolution which was
carried unanimously, and once more put forward their proposals
to the Government of India on the ground that they had the
Legislature’s entire support. But the Government of India
and the Secretary of State held that these tactics were out of
order and that it was
“the duty of the Local Government in dealing with the
resolutions to uphold with all their authority the decision
of the Government of India,”
i.e. to have opposed the resolution even if it agreed with the
Legislature in the principle thereof.
The strong ties of subordination which bound the Provinces
to the Central Government were therefore the chief obstacles in
the path of Provincial autonomy. In order that the Provincial
Government be made subject to Provincial Legislatures, the first
thing to do was to curtail the powers which the Government of
India possessed of interference in provincial finance, provincial
legislation, and provincial administration. As was well observed
by the authors of the Report 3 on Constitutional Reforms :
“We have to demolish the existing structure, at least
in part, before we can build the new. Our business is
one of devolution, of drawing lines of demarcation, of
1 The degree of subordination it should be noted varied with the status of the
Provinces, for which see Joint Report, pp. 37-45.
2 Joint Report, pp. 75-6.
3 Joint Report, p. 101.
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254 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
cutting long-standing ties. The Government of India must
give and the Provinces must receive ; for only so can the
growing organism of self-government in the Provinces
draw air into its lungs and live.”
The path to provincial independence therefore lay through
a satisfactory division of functions and finances between the
Provincial and Central Governments. Of the two, the task of
dividing the functions was comparatively an easier one. For
facilitating the necessary division of functions the following
principles were laid down by the Government of India. 1
“7. There are certain subjects which are at present
under the direct administration of the Government of India.
The Government of India maintain separate staffs for their
administration and the Provincial Governments have no
share in it. The category is easily recognizable, and for
the most part there will not be much room for doubt as
to the subjects to be included in it. At the other end of
the line are matters of predominantly local interest which,
however much conditions must vary between Provinces,
will, generally speaking be recognized as proper subjects
for provincialization.
“8. Between these extreme categories, however, lies
a large indeterminable field which requires further
examination before the principles determining its
classification can be settled. It comprises all the matters in
which the Government of India at present retain ultimate
control, legislative and administrative, but in practice
share the actual administration in varying degrees with
the Provincial Governments. In many cases the extent of
delegation practised is already very wide. The criterion
which the Government of India apply to these is whether
in any given case the Provincial Governments are to be
strictly the agents of the Government of India, or are to
have (subject to what is said below as to the reservation
of powers of intervention) acknowledged authority of their
own. In applying this criterion the main determining factor
will be not the degree of delegation already practised, which
may depend on mere convenience, but the consideration
whether the interests of India as a whole (or at all events
interests larger than those of one Province), or on the other
hand the interests of the Province essentially preponderate.
1 Memorandum for the Functions Committee by the Government of India,
Annexture II to the Report of the Committee Cmd. 103 of 1919.
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THE NATURE OF THE CHANGE
“ The point is that delegation to an agent may be
already extensive, but that circumstance should not
obscure the fact of agency or lead to the agent being
regarded as having inherent powers of his own.”
These principles, in which it was stated that “where
extra-provincial interests predominate the subject should
be treated as central,” while
“all subjects in which the interests of the provinces
essentially predominate should be provincial, and in
respect of (which) the Provincial governments (to) have
acknowledged authority of their own,”
were accepted by the Functions Committee appointed to
make a division between all-India and Provincial subjects.
The recommendations made by the Committee were with
minor amendments embodied in what are called Devolution
Rules under section 45A of the Government of India Act
of 1919, which gave effect to the policy of responsible
government and are made a part of the constitutional
law of the land, so that the subjects thereby devolving
upon the Provinces became the services over which the
Provinces gained an acknowledged authority of their own
such as they never had before 1833. According to these
Devolution Rules the following were declared to be
PROVINCIAL SUBJECTS
1. Local Self-government, that is to say, matters
relating to the constitution and powers of municipal
corporations, improvement trusts, district boards, mining
boards of health and other local authorities established
in a Province for the purpose of local self-government,
exclusive of matters arising under the Cantonments Act,
1910 ; subject to legislation by the Indian Legislature as
regards—
(a) The powers of such authorities to borrow otherwise
than from a Provincial Government, and
(b) the levying by such authorities of taxation not
included in schedule II to the scheduled Taxes Rules.
2. Medical administration, including hospitals,
dispensaries and asylums, and provision for medical
education.