Vol. 6 · pages 96–100
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.
PDF page 96 (printed page 81)
81THE IMPERIAL SYSTEM
may, perhaps be argued on the other hand that much of the
military expenditure, large though it was, went back into the
coffers of the Indians themselves as they formed the bulk of
the forces employed in the country. The Indians of course,
formed a very large portion of the military, 1 and if the scales
of salaries fixed for the European and native forces were
equal the result would have been favourable to the natives
of the country, though it cannot be said to have excused that
huge military expenditure. But the scales of salaries for the
Europeans and natives were so grossly unequal 2 that one
European drew on an average more than the salaries of four
natives put together. So this expenditure, whether from the
standpoint of public utility or private employment, did not
benefit the population which contributed to the revenues of
the State.
1 This may be seen from the following figures :—
STRENGTH OF THE INDIAN ARMY BEFORE THE MUTINY*
European Native Total
Artillery ... 6,419 9,138 15,577
Sappers ... 110 3,043 3,153
Cavalry ... 3,456 30,533 32,989
Infantry ... 29,760 188,660 218,420
Total ... 38,745 231,374 270,119
*Report of Major-General Hancock on the Reorganization of the Indian Army,
Parliamentary paper of the year 1859, p. 21.
2 This is indicated by the following table :—
COST OF AN INFANTRY REGIMENT PER MONTH
EUROPEAN
Details Total
OfÀ cers Rs. As. Ps. Rs. As. Ps.
37 Officers … … 14,734 14 3
Staff and Establishment … … 4,515 12 4 21,779 2 7
Command and other allowances 2,528 8 0
Men
117N.CO.S. … … 2,289 4 5
950 Privates … … 11,203 8 4
Rations, clothing and other charges 12,506 11 3 25,999 8 0
Total 47,778 10 7
PDF page 97 (printed page 82)
82 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
The civil and political charges which absorbed nearly 10 per
cent. of the revenue can hardly be said to be recuperative in
their effect. This part of the expenditure again was not shared
by the native population which bore its burden. As a result
of conquest the natives naturally came to occupy a secondary
position; but the conquest had done more than merely degrade
their status. It had engendered a certain sense of distrust
for the natives in the minds of Englishmen. Conquered and
distrusted the natives since the commencement of British rule
had come to be excluded from the higher administrative posts
of the country.1 It was to remove this injustice that Parliament
in the Act of 1833 provided
“that no native of the said territories, nor any naturalborn subject of His Majesty resident therein, shall, by
reason only of his religion, place of birth, descent, colour
or any of them be disabled from holding any place, office,
or employment under the said Company” (sec. 87).
NATIVE
Details Total
OfÀ cers Rs. As. Ps. Rs. As. Ps.
26 Europeans … … 9,861 2 1
20 Natives … … 940 0 0 13,527 8 7
Staff and
Establishment
… … 1,209 1 4
Command and other
allowances
… 1,517 5 2
Men
140 N.C.O.s. … … 1,780 0 0
1,000 Sepoys … … 7,000 0 0 9,606 14 0
Charges … … 826 14 0
Total 23,134 6 7
It is evident from this table that if we deduct the salary of 26 European
officers and command and other allowances shown under the heading “Native”
which amounts to Rs. 11,378 7. 3. we shall find that 1,104 Europeans drew Rs.
47,778 10. 7. while 1,160 natives drew only Rs. 11,755 15. 4.
1 Before 1833 the very meagre scale on which they were employed is disclosed
by the following figures :—
Native Civil Servants
of the 1st Class attached
to the Secretariat of the
3 Precidencies
Receiving per Month
Salaries of :—
Bengal Madras Bombay Total
Total
Salary
Drawn
Total
Salary
Drawn
Total
Salary
Drawn
Total
Salary
Drawn
No. No. No. No.
Rs. 500 and upwards 5 2,700 … … 5 2,500
Rs. 400 ” 2 800 … … 1 400
Rs. 350 ” 4 1,400 1 350 1 350
Rs. 300 ” 3 900 … … 2 600
Rs. 250 ” 5 1,250 … … 1 250 89 20,690
From Rs. 250 to 200 17 3,460 5 1,155 1 200
From Rs, 200 to 150 10 1,590 4 682½ … …
From Rs. 100 to 150 5 550 5 525 5 330
Below Rs. 100 6 470 1 87½ 2 140
Total 57 13,120 16 2,800 16 4,770
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83THE IMPERIAL SYSTEM
But, as a matter of fact, till after the Mutiny not one of
the natives was appointed to any office except such as they
were eligible for before this Statute was passed, because the
Court of Directors in interpreting it advised the Government
of India at the very start that by this enactment
“practically......no very marked difference of results
will be occasioned. The distinction between the situations
allotted to the convenanted service and all other situations
of any official or public nature will remain generally as
at present.” 1
The Judicial and police charges, which together absorbed
something like 10 per cent. of the total revenue raised, can only
be regarded as protective in their character. Thus the bulk of
the money raised by injurious taxes was spent in unproductive
ways. The agencies of war were cultivated in the name of peace,
and they absorbed so much of the total funds that nothing
practically was left for the agencies of progress. Education
formed no part of the expenditure incurred and useful public
works were lamentably few. Railways, canals for navigation
or irrigation and other aids to the development of commerce
and industry for a long time found no corner in the Imperial
budget. For a total area of 837,000 square miles there were
constructed a few miles of railways, 2,157 miles of land ways,
580 miles of waterways and 80 miles of telegraph. Or speaking
in terms of money spent, we find that for the entire period of
fifteen years from 1837-8 to 1851-2 the average expenditure
of a productive character amounted only to £ 299,732
1 Despatch to Bengal No. 44 dated December 10, 1834, para. 107.
*Report of the Civil Finance Committee on Native Establishment at the three
Presidencies,—Bengal Financial Consultations dated April 13, 1830. India Office
Records. The subordinate establishments of uncovenanted Christian and native
servants attached to the several presidencies were divided by the Committee
into four classes, (1) comprehending Head clerks, Registrars, Managers and
their assistants, Examiners, Investors, etc., employed under the Secretaries in
superintending and conducting the business of the office; (2) Current Business
Writers, and permanent Copyists; (3) Sectioners or copyists paid by piece work,
and (4) all inferior servants. The Committee found that
Para. 35. The salaries received by the Current Business Writers in Calcutta
vary from Rs. 20 to Rs. 300 per mensem, an average for each individual Rs. 104;
in Bombay they vary from Rs. 15 to 120, an average Rs. 48; at Madras it is an
established rule that the average remuneration to servants of this description in
the Secretariat at that Presidency is Rs. 27½ , which is distributed at various
rates from 10½ to 87½, rupees, according to the claims of the individuals from
length of service and utility......
Sectioners in the Secretariat office, Bengal, were paid at the rate of 750 words
per rupee; while at the other two Presidencies it was about 1333 words for a rupee.
Para. 51. The present charge for servants attached to the Secretariat in Bengal
is Rs. 1,142 per month; at Madras, including mochies (cobblers), Rs. 455; and
at Bombay, Rs. 261. In Bengal there were 186 servants; in Madras 56; and in
Bombay 42.
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84 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
a year.1 There is a principle well known to farmers that constant
cropping without manuring ends in the exhaustion of the soil.
It is, however, capable of wider application, and had it been
observed in the State economy of India the taxing capacity of
the country would have grown to the benefit of the treasury
and the people. Unfortunately it was lost upon the financiers
of India to the detriment of both.
But if the chance of augmenting the resources by judicious
taxes and productive expenditure to cover the chronic deficits
was forfeited, there was at least the way open for economy
in expenditure. As might be supposed, a strong Central
Government of the kind established in 1833 was capable of
effecting economy wherever possible. As a matter of fact,
the centralization was of the weakest kind. De jure there
was an Imperial system of administration, but the de facto
administration was conducted as though the primary units
of executive government were the Provinces and that the
Government of India was only a co-ordinating authority. This
was obvious from a variety of circumstances. Legislation was,
it is true, centred in the Government of India; none the less
the laws that were passed by the Government of India were
passed for the different provinces as though the initiative in
legislation still lay in the Provinces and that the Government
of India was only a sanctioning authority. Each Province had
its own customs, internal as well as external, a survival of
their sovereign status. Each Province continued to have its
own Army. Notwithstanding centralization, the account system
still remained provincial, sustaining the sense of their financial
independence. The work of administration and collection of
revenue being still conducted by them, the provinces behaved
as though they were the lawful authorities charged with the
responsibilities of Government. This spirit of independence
bred insubordination, and some of the Provinces, particularly
Bombay and Madras, endeavoured to resist the attempts of the
Government of India to tax the people under their jurisdiction
when the cost of the mutiny compelled it to levy fresh burdens.
The point to be borne in mind is that the Act of 1833 made
an unfortunate divorce between the legal and administrative
responsibility. The Imperial Government were responsible
in law but did not administer the country. The Provincial
1 Statistical paper relative to British India. Edited by Thornton, 1853.
PDF page 100 (printed page 85)
85THE IMPERIAL SYSTEM
Governments administered the country but had no responsibility
in law. This divorce had a fatal effect on the economy in
the finances of the country. As was inevitable extravagance
in expenditure had become the rule in practice and it was
inherent in the Imperial system itself. Economy is begotten
of responsibility, and responsibility is obtained where a
government has to find the resources to meet the charges
it desires to incur. Prior to the inauguration of the Imperial
system the Provincial Government had the obligation to raise
money for the charges included in their budgets. Consequently
they had to be economical. But under the Imperial system,
while the budgets for the various services were prepared by
the provincial authorities, the responsibility for finding the
ways and means rested on the Government of India. Formerly
they knew the limits of the purse they had to draw upon, but
under the Imperial system they
“had no means of knowing the measure by which
their annual demands upon the Government of India
ought to be regulated. They had a purse to draw upon of
unlimited because of unknown depth. They saw on every
side the necessity for improvements, and their constant
and justifiable desire was to obtain for their own provinces
as large a share as they could persuade the Government
of India to give them out of the general revenues of the
Empire. They found by experience that the less economy
they practised, and the more importunate their demands,
the more likely they were to persuade the Government
of India of their requirements. In representing these
requirements, they felt that they did what was right, and
they left to the Government of India, which had taken
upon itself, the responsibility of refusing to provide the
necessary means.” 1
To these extravagant demands the Government of India
had often to yield; for, till very late, it did not possess the
machinery to appraise the demands and to control the
expenditure on them. It is not usual to expect much efficiency
from any Imperial system of administration, much less when
it covers not a department, not a province, but a country
as big as a continent. Merely from being huge it is slow to
move. Much slower would it necessarily be if it were a system
as unorganized and unconsolidated as the Indian system
was. First of all, the Imperial system in India was without
1 The Administration of the Earl of Mayo, as Viceroy and Governor-General
of India— a Minute by the Honourable John Strachey, a member of the Council
and late acting Governor-General, dated April 30, 1872. Calcutta Office of the
Superintendent of Government Printing, 1872, p. 46.