THE
EVOLUTION OF PROVINCIAL FINANCE IN BRITISH INDIA
____________________________________________________________________________________
PART II: PROVINCIAL FINANCE: ITS DEVELOPMENT
CHAPTER
VI
1882-83
to 1920-21
At
every step in the direction of enlarging the Provincial Budgets the crucial question, as
has already been pointed out, was with regard to the difficulties of balancing the
revenues and charges proposed to be incorporated therein. The two steps heretofore taken,
one in 1871 and another in 1877, in the direction of the evolution of Provincial Finance,
were marked by two distinct methods of balancing the Provincial Budgets. On the former
occasion the Imperial Government supplied the Provincial Governments with fixed lump sum
assignments from the Imperial treasury. On the latter occasion this mode of supply was
partly replaced by assigning certain sources of revenue for the use of provincial
Governments. The plan of assigned revenues, though it went a great way to remove the most
serious defect of the measures of 1871-2, which transferred to the Local Governments the
responsibility of meeting charges which had an undoubted tendency to increase, with income
which, although not quite fixed, had little room for development, fell short of the
requirements of Provincial Finance from the standpoint of elasticity. Superior to those of
1871 though they were, the measures of 1877 were so short of the fullest requirements of
elasticity in finance that the Government of Madras refused to accept the enlarged scheme
and preferred to abide by the arrangements of 1871. The
scheme of 1877 was not offered to Burma or Assam. But when the Government of India made
such an offer in 1879 it was obliged to turn over a new leaf, for, though the difficulty
of meeting expanding charges with fixed assignments was overcome in some of the provinces
by economy and good management, it was considerably felt by the province of Burma. The
expenditure of the province in the seven years preceding the scheme of Provincial Finance
aggregated to Rs. 1,98,45,970, while the assignments for
the following seven years, aggregated apart
from special additions, Rs. 2,20,22,770, showing an excess of Rs. 21,76,800, in all or
about 3 lakhs a year. But the expenditure during the same period amounted to Rs. 2,40,77,885, being an excess of Rs.
42,31,915 in all or about 6 lakhs a year. The difference therefore between the excess
assignment of 3 lakhs, and the excess expenditure of 6 lakhs a year, had to be made good
by the Imperial Government by special grants averaging 2
3/4 lakhs every year to maintain the solvency of the Province.[f1]
The Government of India while making the supplementary assignments was not unconscious of
the demoralising effect of such doles. In fact it was admitted that it would have been
much better to have augmented the provincial assignments to Burma by 22 1/2, lakhs at the start had it foreseen the necessity for it,
than to have been obliged to grant an equal amount in the form of supplementary aids so
detrimental to economy and good management. The experience of Burma had driven home the
fatuity of assignments as a mode of supply and the Government of India had realised that
elasticity in revenues was a vital condition for the success of Provincial Finance. To
assign revenues to Burma was therefore inevitable. Being overborne by the needs of the
Province and by the fact that the Province yielded a substantial surplus to the Imperial
treasury, the Government of India conceded that the Province was " entitled to have its real wants supplied more liberally
than heretofore."[f2]
It is in the method adopted for the purpose of giving a liberal treatment to the province
of Burma that the new step in the method of supply to the Provinces was taken. In the
settlements made in 1877-8 with the five Provinces—Central Provinces, N.W.P. and Oudh, the Punjab,
Bombay and Bengal—the Heads of Account under Revenue and Expenditure comprising the
Indian Budget were grouped under two distinct categories :
(1) wholly Imperial and (2) wholly Provincial. But in the case of Burma the Heads of
Account were grouped under three distinct categories : (1)
wholly Imperial, (2) wholly Provincial, and (3) jointly Imperial and Provincial3 In so far
as items of revenue and expenditure were in the exclusive keeping of the Imperial or the
Provincial Government, the settlement did not differ in spirit from that obtaining in
other provinces. The difference consisted in carving out a third category of Account to be
made of jointly Imperial
and Provincial. By it certain revenues and charges were marked off from the rest and
were shared between the Imperial and the Provincial in some definitely fixed proportion.
The object of the arrangement was to replace rigidity in the Provincial revenues by
elasticity. In the finances of the other Provinces there was elasticity in so far as their
assignments were replaced by assigned sources of revenue. But to the degree in which their
revenues were made up of fixed assignments their finances inevitably suffered from
rigidity. In the case of Burma, however, the substitution of shares of growing revenues
for fixed assignments gave complete elasticity to the Provincial revenues without which it
had become so difficult to shoulder the responsibility of meeting expanding charges. - In
recasting the framework of the Provincial Budget of Burma on the principle of shared
revenues, all the heads of receipts and charges were made wholly Provincial, with the
exception of the following, which were treated as wholly Imperial :—
(1)
The Army
Receipts and Charges.
(2)
Postoffice
“
(3)
Telegraph “
(4)
Account Department “
(5)
Meteorological Department...
“
(6)
Political
“
(7)
Remittance of Treasure and “
Premium
on Bills of Exchange and
unclaimed
Bills of Exchange.
The
third category of revenues and charges, namely, jointly Imperial and Provincial, covered
the following items :—
(1)
Land Revenue, including capitation tax, but excluding Fisheries, with such Land Revenue
Refunds, charges of collection and settlement as cannot be attributed to Fisheries only.
(2)
Forest revenue. Expenditure and Refunds.
(3)
Export Duty on rice, and Refunds.
(4)
Salt Revenue, Expenditure and Refunds.
Items
comprising the third category were divided between the Imperial and Provincial Governments
in the proportion of five-sixths to the former and one-sixth to the latter. By adopting
this method of supply Burma, unlike other provinces, secured funds of an elastic
character, for, even though the shares remained fixed the amount they brought in any one
year varied with the variation in the total yield of the revenues assigned or shared. Of
course everything depended upon how Burma nursed the revenues delegated to its control.
But if it did its duty, unlike the other provinces, its labours were not to be unrequited.
The
same principle of shared revenues was applied to the province of Assam, which had hitherto
continued on the old basis of 1871. Although the settlement with that Province had been
made after that with Burma had been carried out, the principle of shared revenues as a
mode of balancing the Provincial Budget was not adopted on any appreciable scale. The
reason for this break in the progressive realisation of the principle is not to be
attributed to any spirit of hesitation on the part of the Government of India, but is to
be ascribed mainly to the necessity of the case. As it was contemplated to reincorporate
the province into Bengal it was deemed expedient to frame the Provincial Budget of Assam
on the same plan as that of Bengal so that their financial fusion might be as easy as the
administrative. Thus the heads of revenue and expenditure which were provincial in Bengal
since 1877 were also made provincial in Assam in 1879, including " Law Officers," which for temporary reasons were
reserved as Imperial in Bengal. The only point at which the new principle was applied
consisted in making the Land Revenue head in Assam a joint head to be shared by the
Imperial and the Provincial Governments in the proportion of four-fifths of its net yield
to the former and one-fifth to the latter.[f3]
The
beneficial results of the new settlement with these two Provinces are easily to be seen
from the following comparative table of the estimates of their budgets as prepared on the
old basis and as recast on the new :—
000
omitted
|
Assam Budget Estimates
|
Bt.
Burma Budget Estimates |
||||||
|
Old Basis
|
New
Basis |
Old Basis
|
New
Basis |
||||
|
1878-79 |
1879-80 |
1878-79 |
1879-80 |
1878-79 |
1879-80 |
1878-79 |
1879-80 |
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
Revenue
Expenditure Surplus Deficit Closing
Balance |
2115 2253 138 206 |
2110 2261 151
55 |
3657 3480 177
521 |
3596 3566 30 555 |
4013 4169 156 873 |
4078 5111 1033
161 |
9459 8926 533 1562 |
9673 10119 526 1436 |
From
the Resolution of the Government of India in the Department
of Finance and Commerce, No. 1249, dated March 13, 1879.
Once
the new principle of shared revenues was established in the case of Burma and Assam it was
not possible for the Government of India to withhold its application from the other
Provinces. The settlements made in 1877 with the several Provinces were not only of short
duration but were also of unequal durations. It was only in the case of Bengal and Bombay
that the settlements were made for five years commencing from 1877-8. In the case of the
Central Provinces and the Punjab the period fixed was three years, while in the case of
the North-Western Provinces it was as short as two years, from 1877-8. It is evident from
this that the settlements with some other Provinces were to have expired soon after those
with Burma and Assam had been completed, and would have required to be reconstituted on
the basis of shared revenues. The Government of India, however, delayed the process, and
in that it did wisely, for it was too soon to make the new principle of shared revenues
and charges a basis for universal application. It was nothing but prudent to have regarded
it as it were in its experimental stage. Secondly, the disadvantages of the ex-parte treatment
of the Provincial Budget had come to be realised. It then dawned upon the Government of
India that the several provincial Budgets were only parts of an organic whole, viz., the Imperial Budget, and it was manifestly inadvisable to
frame the Provincial Budgets each by itself without regard to the claims, needs and
exigencies of all others. But in order that this comparative and compromising operation of
judging the claims of one in the light of the needs of others be performed with the
desired effect of treating the different provinces in an equitable manner, it was
essential that all the Provincial Budgets be dealt with simultaneously. The importance of
this consideration and the desire to gain time in order to profit by the experiences of
Burma and Assam led the Government of India with the consent of the Provincial Governments
to extend or shorten, as the case may be, the duration of their financial agreements with
the Provinces so as to bring about a synchronous expiry of them all on March 31, 1882.
Financial
Settlements of 1882-83
The
new settlements made with all the provinces with effect from 1882-31[f4]
were marked by an extension of the principle applied to Burma since 1878. Certain heads,
as few in number as possible, of revenues and charges were wholly, or with minute local exceptions only, grouped as Imperial.
Others were classed as wholly Provincial. The remaining were placed in an intermediate
category designated as joint and were in most part shared equally between the Imperial and
the Provincial Governments. In those cases, however, where the provincialised expenditure
exceeded the resources from the provincialised as well as the shared revenues, the balance
instead of being provided as heretofore by fixed assignments from the Imperial exchequer
was rectified for each Province by a fixed percentage on its land revenue—a wholly
Imperial head of revenue except in the case of Burma, where the percentage was extended to
the Imperial rice export duty and salt revenue as well.
Along
with the enlargement of the scheme of Provincial Finance in 1882 the Government of India
was also anxious to introduce simplicity and uniformity in the matter of grouping the
different heads of revenue and expenditure under the three categories
now established. It will be remembered that the agreements effected in 1877 were
marked by diversity and intricacy. The same charges were not provincialised in all the
Provinces. A charge which was Provincial in one was Imperial in another. Again, in
transferring charges a grant was often broken up so that a part was made Provincial and a
part reserved as Imperial. On the revenue side the arrangement was not a little intricate.
The computations owing to the proviso in respect of the assigned revenues made the
calculations far from simple. Both these defects were, however, removed when the
settlements were framed in 1882, and it is to indicate what heads of revenue and
expenditure were provincialised, what were imperialised,
and what were divided and to what extent, that the following attempt is made.
Revenues—.
|
Imperial |
Provincial
|
Land
Revenue |
The
whole except as entered in the Provincial Column |
N.W.P. and Oudh
collections from the Terai, Bhabar
and Dudhi Estates, Rents of Water-Mills and Stone
Quarries; in Bombay, Rents of Resumed Service
Lands and Service Commutations. In all Provinces, a fixed percentage
on the Imperial land revenue to cover the difference between Provincial Revenue and Provincial Expenditure |
11
Tributes |
The
whole. |
Nil. |
III
Forest |
Half. |
Half. |
IV
Excise |
Do. |
Do. |
V
Assessed Taxes |
Do. |
Do. |
VI
Provincial Rates |
Nil. |
The
whole. |
VII
Customs |
All
except as entered in the Provincial Column |
All
items other than Customs Duties: and, in Burma
only, the same percentage on Export Duties as on the Land Revenue. |
VIII
Salt |
All
except as entered in the Provincial Column |
All
items other than Duty on Salt and sale of Salt; and, in Burma only, the same percentage
on the salt Revenue as on the Land Revenue |
IX
Opium |
The
whole. |
Nil. |
X
Stamps |
Half. |
Half. |
XI
Registration |
Do. |
Do. |
XIII
Post Office |
Nil. |
The
whole. |
XIV
Minor Departments |
Do. |
Do. |
XVI
Law and Justice |
Do. |
Do. |
XVII Police |
Do. |
Do. |
XVIII
Marine |
As
at present. |
As
at present. |
XIX
Education |
Nil. |
The
whole. |
XX
Medical |
Do. |
Do. |
XXI
Stationery and Printing. |
Nil. |
The
whole. |
XXII
Interest |
All
except as entered in the Provincial Column. |
Interest
on Government securities (Provincial). |
XXIII
Pensions |
Book
transfers from the Military and Medical Funds and subscriptions to these Funds |
The
remainder. |
XXIV
Miscellaneous |
Gain
by Exchange on Imperial transactions, Premia on Bills and unclaimed Bills of Exchange |
The
remainder. |
XXV
Railway |
As
at present. |
Whatever
is now provincial in each Province. |
XXVI
Irrigation and Navigation. |
Do. |
Do. |
XXVII Other Public Works |
Receipts
from Military Works |
The
remainder. |
XXXI
Gain by Exchange on Transactions with London |
The
whole. |
Nil. |
Expenditure
1.
Interest |
The
whole except as entered in the Provincial Column. |
Interest
on local Debenture Loans. 4 1/2 percent, on the capital cost to the commencement of the
year, and 2 1/2 per cent. on the capital cost during the year, of all Public Works,
whether classified as Productive Public Works or not, of which Capital and Revenue Accounts are
kept: excepting, always, any portion of their cost supplied from the Provincial Revenues
or by Local Debenture Loans. The rate of interest on the cost of Protective Public Works
will be the subject of a special agreement. |
|||
2.
Interest on Service Fund's and other Accounts. |
Interest
on Service Funds and deposits in Savings Banks. |
The
remainder. |
|||
3.
Refunds and Drawbacks |
Of
the Imperial share of revenues. |
Of
the Provincial share of revenues. |
|||
4.
Land Revenues |
The
same percentage on charges for collection of Land Revenue and on the cost of Surveys
(including expenditure hitherto charged in the Accounts of the Central Government) and
Settlements elsewhere than in Bombay and Madras, as is
retained of Land Revenue. |
The
remainder. |
|||
5.
Forest |
Half |
Half.
Do. Do. The whole. Do. The remainder. |
|||
6.
Excise |
Do. |
Nil.
Half. Half. The whole. Do. |
|||
7.
Assessed Taxes |
Do. |
" |
|||
8.
Provincial Rates |
Nil |
|
|||
9.
Customs |
Do. |
|
|||
10.
Salt |
In
Madras the whole. Elsewhere the purchase and
manufacture of salt; and in Bengal the cost of
preventive lines and operations: in Bombay
charges connected with the administration of Salt Revenue in Portuguese India. |
|
|||
11.
Opium |
The
whole |
|
|||
12.
Stamps |
Half |
|
|||
13.
Registration |
Half |
|
|||
15.
Postoffice |
Nil |
|
|||
16.
Telegraph |
Do. |
|
|||
|
17.
Administration |
Account
and Currency Offices and allowances to Presidency Banks. |
The remainder. |
||
|
Archaeological
and Meteoro logical Depts., Census Gazetteers and
Statistical Memoirs. |
The
remainder. |
|||
|
19.
Law and Justice |
Nil. |
The
whole. |
||
|
20.
Police |
Frontier
Police and Police employed on Imperial State Railways on Salt preventive duties. |
The
remainder. |
||
|
21.
Marine |
Whatever
is now Imperial. |
Whatever
is now Provincial. |
||
|
22.
Education |
Do. |
Do. |
||
|
23.
Ecclesiastical |
The
whole. |
Nil. |
||
|
24.
Medical |
Nil. |
The
whole. |
||
|
25.
Stationery and Printing |
Stationery
purchased for Central Stores. |
The
remainder, including cost of stationery obtained from Central Stores. |
||
|
'26.
Political |
The
whole. |
Nil. |
||
|
27.
Allowances and Assignment |
The
whole except as in the Provincial Column. |
In
Bombay, items now Provincial |
||
|
28.
Civil Furlough and |
The
whole. |
Nil. |
||
|
Absentee
Allowances. |
|
|
||
|
29.
Superannuations |
Items
not provided for in the Al Provincial Column. |
pensions
and gratuities, except pensions payable from the Military and Medical Funds brought to
account in India: each Government being responsible for pensions and gratuities which it
now pays, or hereafter grants or recommends, however earned and wherever paid. |
||
|
30.
Miscellaneous |
Remittance
of treasure, and discount on Supply Bills. |
The
remainder. |
||
|
31.
Famine Relief |
Secondary
liability. |
Wholly
Provincial. |
||
|
32.
Railways |
As
at present. |
Whatever
is now Provincial. |
||
|
33.
Irrigation |
Do. |
Do. |
||
|
34.
Other Public Works |
Military
Public Works, and except in British Burma, Offices of the Supreme Government; Works in the Salt, Opium,
Post Office, Imperial Telegraph and Ecclesiastical Depts. And Mint and Currency Offices;
and Bengal Surveyor General's Offices. |
The
remainder. |
||
|
38.
Loss by Exchange |
The
whole. |
Nil. |
||
On
the transactions of 1881-82 the Government expected to gain £ 470,000 a year. Of this sum, however, it returned to the Central Provinces £77,900,
for improving the position of the subordinate civil services and other general purposes;
to Madras, £ 20,000, for provincial public works; and to the N.W.P.
and Oudh, £326,000, of which £ 10,000 was for additional Kanungoes in Oudh, and the remainder, £316,000, for a
remission of local taxation. Besides these benefactions the Government of India gave for a
favourable start to Bengal, £ 285,000; Burma, £ 20,000; N.W.P.,
£ 55,000, to be added to their balances before the close of the year 1881-2. These
benefactions, which amounted to £496,000 a year, were expected to turn the annual gain of
£470,000 into an annual loss of £26,000 to the Imperial exchequer[f5]
In
this connection it must also be recalled that the Government of India reimbursed the
Provincial Governments of the amount of the benevolences it had levied on them in the
years 1879-80 and 1880-1. But not long after the revision
of 1882 the financial position of the Government of India, which had permitted of such a
liberal treatment, suffered a reverse, and the necessity for levying benevolences on the
balances of the Provincial governments reappeared in 1886-7. In presenting the financial
Statement for that year the Finance Member of the Government of India argued:—
"22.
Since the estimates for 1885-6 were presented...... Indian
administration and finance have entered on a new phase. The brief period of rest which the
country had enjoyed since 1882 had drawn to a close......
By the events of the late years in Central Asia, India finds herself almost in contact
with one of the great European Powers, and she cannot hope to escape the necessity which
the position imposes on her of increasing her military strength. Events impending have
occurred which have changed, as it was known they must change, the face of our estimates,
and have thrust us violently out of the peaceful path of internal progress in which we had
hoped to have been left undisturbed."
Among
the other means employed to weather the storm the Government of India resorted a second
time to nibbling at the provincial resources, and gathered a sum of £400,000 in the year
1886-7 by appropriating from their balances the above amount.
The
condition of Provincial Finance during this period may be summarised in the following
table :—
|
Annual
Surpluses and Deficits |
||||
Provinces |
1882-3 |
1883-4 |
1884-5 |
1885-6 |
1886-7 |
|
£ |
£ |
£ |
£ |
£ |
C.P. |
33,775 |
76,212 |
18,047 |
22,080 |
115,656 |
Burma |
171,207 |
—90,030 |
—89,725* |
# |
71,743** |
Assam |
13,887 |
—5,216 |
—40,577 |
25,299 |
28,576 |
Bengal |
539,611 |
146,027 |
48,910 |
26,777 |
52,911 |
N.W.P.&
Oudh |
281,222 |
357,630 |
—69,276 |
—180,060 |
—12,408 |
Punjab |
—110,966 |
—15,765 |
—41,545 |
42,447 |
3,106 |
Madras |
108,421 |
10,820 |
—87,284 |
146,692 |
—78,689 |
Bombay |
—149,894 |
—2,585 |
6,006 |
291,976 |
—161,369 |
*No
balance left at the dose of the year.
#
Equilibrium.
**Balance obtained by excess of current revenue
over current expenditure of the year.
Compiled
from the annual Finance and Revenue Accounts of the Government of India.
The
settlements entered into with the Provincial Governments in the year 1882-3 not only
differed from the preceding settlements in the replacement of fixed assignments by shares
in the Imperial revenues, but they also differed in another important respect, namely,
their duration. Though the results of the scheme of provincial Finance have been presented
in one Table covering the period 1871-7, it must not be supposed that the settlements with
the various Provinces were made for the period of six years. On the other hand, the
settlements were only annual and lasted up to 1877 by the process of constant renewals.
The results have been presented together for a continuous period not because the settlements were made for that period, but because the
principle on which they were based endured for that period. After 1877 the settlements no
doubt were made for a longer period. In two cases they were for five years and for the
rest the period ranged between two and three years. The short duration system, like the
fixed assignment system, was of immense advantage to the Imperial treasury. The object of
these settlements, it will be recalled, was firstly to put a definite limit on the demands
of the Provincial Governments on the already too scanty resources of the Imperial
Government. Evidently this object would have been better served had the duration of the
settlements been longer than it was. But a longer duration would have deprived the
Imperial treasury of its right to profit by an early revision of the revenue side of the
contract. It was this consideration of not remaining too long out of pocket, that had
hitherto prevailed upon the Government of India to shorten the duration of contracts as
much as possible. But what was an advantage to the Imperial treasury was from the
standpoint of the Provincial Government a serious drawback. Owing to the short durations
of the settlements the Provincial Governments were not in a position to distribute the
funds at their disposal on the incorporated services so as to open a new page in their
financial history. They could not adopt a definite financial policy, for they feared that
the new terms on renewal might compel them either to give up the policy or modify it so
seriously as to prejudice its results. A single budget may seem nothing more than the
conspectus of financial happenings of the year to which it pertains, yet to the financier
who frames them year after year they embody a definite policy running towards its
consummation. But a policy, however wisely adopted, may be thwarted
by an unwise disturbance of the uniformity of conditions on which its fulfilment depends.
This was just the flaw that deteriorated the sound working of Provincial Finance. Constant
renewals had a general disturbing effect, and the duration between any two of them was
indeed too short to give a stable state of conditions. Being impressed by the fact that
the advantages of a short-duration-contract to the Imperial treasury were enormously
counterbalanced by its disadvantages to Provincial Finance, the Government of India, on
the occasion of revising the settlements in 1882-3, made it a definite rule that they
shall be quinquennial in duration ; that is, they shall not
be subject to revision before the end of the fifth year from their commencement.
Revision of 1887-88
By
virtue of this rule the settlements made in 1882-3 expired in 1887. The revision then
undertaken, as well as the subsequent ones, left as a rule undisturbed the two categories
of revenue and expenditure, namely, those wholly Provincial and wholly Imperial. It became
almost a convention to leave them as they were since the separation in 1882, when the
constitution of Provincial Budgets was thoroughly overhauled and consolidated. The only
heads of revenue and expenditure that were revised, as revision fell due, were those that
were grouped under the third category, namely, jointly Imperial and Provincial, otherwise
known as " Divided Heads."
In
the revision of 1887-8 the decisive factor was the unsatisfactory position of the Imperial
Finances already referred to. To improve its financial position the shares in the joint
heads were altered so that each Local Government was allowed to appropriate three-fourths
of the stamps and one-fourth of the excise revenue, and required to bear the expenditure
under those heads in like proportion. The proportions of land revenue were also altered so
that three-fourths of it was made Imperial, and one-fourth Provincial. But the needs of
the Imperial treasury were so great that the Government of India even revised some of the
heads of the other two categories, namely, Salt, Customs,
Interest, Irrigation and Railways, to its own advantage. The details of the gain to the
Imperial treasury are as given below :—
Revenue |
Imperial
Share Increased
—Decreased |
Net
Gain |
||
|
|
|
||
Land
Revenue |
437,500 |
|
|
|
Stamps
(share reduced from 1/2 to 1/4 Excise (share increased from 1/2 to 3/4) Salt revenue of
Burma imperialised Customs revenue of Burma imperialised Assessed taxes—divided in
moieties |
—810,000
947,500 } 5,000 155,000 —290,000 } |
215,000 |
|
|
State
Railways gross earnings— Nagpur Chhattisgarh Patna-Gaya } |
—310,000 |
|
|
|
Cawnpore-Achneyra
} |
|
|
|
|
Eastern
Bengal, provincialised |
—540,000 |
|
|
|
Expenditure |
Increased
—Decreased |
Net
Gain |
||
Land
Revenue, entire provincialization of survey and settlement |
145,000
|
|
|
|
Salt
in Bombay imperialised |
—90,000
{ |
|
|
|
Customs
in Bombay imperialised |
—50,000 |
|
|
|
State
Railways— |
|
|
|
|
Working
expenses:— |
|
|
|
|
Provincialised |
305,000
{ |
|
395,000 |
|
Imperialised
... |
—215,000 |
} |
|
|
Interest—Provincialised |
—70,000 |
|
|
|
Imperialised |
—65,000 |
} |
|
|
Irrigation—Provincialised.
Bengal |
65,000
{' |
|
|
|
Irrigation—Provincialised
Madras |
230,000 |
} |
|
|
Add—Small
items of accounts unenumerated |
|
20,000 |
||
This
gain to the Imperial treasury was distributed in the following proportion among the
various Provinces :—
Provinces |
Increase
of annual resources under the principal Provincial Heads of Revenue as estimated on
comparison of 1882 and 1887 |
Amount
by which Annual Provincial Resources were reduced by the Revision of 1887 |
||
|
Land
Revenue |
Stamps
and Excise |
Total |
|
|
£ |
£ |
£ |
£ |
C.P. |
2,200 |
45,500 |
47,700 |
15,600 |
Burma |
4,700 |
9,200 |
13,000 |
|
Assam |
22,300 |
21,300 |
43,600 |
24,600 |
Bengal
N.W.P. |
19,200
8,000 |
171,550
1 30,150 |
190.750
138,150 |
103,600
100,000 |
Punjab
Madras |
32,800
27,750 |
23,100
1 42,550 |
55,900
150,300 |
174,400 |
Bombay
|
99,000 |
198,550 |
297,550 |
221,900 |
Total
... |
195,950 |
741,900 |
937,850 |
640,100 |
This would have been the net gain to the Imperial treasury had it not been for the fact that it conceded to Burma the sum of £ 10,000. The net gain was thus reduced to £ 530,100 per annum. The condition of Provincial Finance during the period of 1887-92 may be judged from the following table presenting the annual surplus and deficit of each of the different Provinces :—
|
Annual Surpluses and Deficits
|
||||
|
1887-88 |
1888-89 |
1889-90 |
1890-91 |
1891-92 |
|
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
c.p. |
13,148 |
22,583 |
—12,322 |
—31,573 |
17,540 |
Burma |
77,028 |
11,560 |
64,072 |
106,216 |
50,598 |
Assam |
7,751 |
26,343 |
20,090 |
—17,871 |
31,185 |
Bengal |
131,007 |
—65,792 |
102,547 |
—120,377 |
—11,934 |
N.W.P.
& 0udh . |
—53,900 |
45,949 |
102,710 |
—12,544 |
—4,399 |
Punjab |
12,446 |
32,142 |
29,264 |
31,367 |
—1,719 |
Madras |
105,371 |
113,932 |
144,571 |
—136,739 |
—241,770 |
Bombay |
—24,574 |
18,322 |
41,361 |
—123,887 |
—53,189 |
Compiled
from the annual Finance and Revenue Accounts of the Government of India.
Revision
of 1892-3
The
next revision of provincial settlements under the rule of quinquennial revisions occurred
in 1892-3. The new settlements to commence from that year did not differ in principle from
those of 1887-8. The shares in the Joint Revenue were so readjusted as to give to the
Imperial treasury a larger gain from the growing yield of the provincialised sources. The
amount resumed by the Imperial Government at this revision through readjustments of shares
was estimated as follows :—
Province
|
Increase
of Revenue in 1891-92 (Revised Est.) as compared with the Estimate for the Contract of
1887-88 to 1891-92 |
Amount resumed by the Government of India
|
|
Rs. |
Rs. |
C.P. |
119,200 |
22,700 |
Lower
Burma |
334,900 |
58,900 |
Bengal |
517,700 |
51,900 |
N.W.P.&Oudh |
53,300 |
56,900 |
Punjab |
195,400 |
41,000 |
Madras |
313,200 |
103,800 |
Bombay |
399,200 |
131,100 |
Assam |
99,800 |
|
Total |
2,042,700 |
466,300 |
But
this gain to the Imperial treasury seriously disturbed the equilibrium between the
expenditure of the Provinces estimated as normal for the ensuing period and the normal
estimated yield of revenues left to them. To restore equilibrium between their normal
expenditure and normal revenue the Government of India reverted to the discarded method of
fixed adjusting assignments, so that while the actual revenues and charges deviated from
what was estimated as normal for the period of the settlement, the adjusting entry allowed
by the Imperial Government to each of the provinces remained fixed throughout the whole
period. The following is a statement of estimated normal expenditure and revenues of the
different Provinces with their respective adjusting assignments as fixed for the new
period :—
Provinces |
Provincial
Revenues |
Provincial
Expenditure |
||
|
Ordinary
Revenue being a share of certain Receipts |
Adjusting
Assignments |
Total
|
|
|
Rs. |
Rs. |
Rs. |
Rs. |
C.P. |
567,600 |
220,500 |
788,100 |
788,100 |
Lower
Burma |
1,427,500 |
414,300 |
1,841,800 |
1,841,800 |
Assam |
657,700 |
—112,700 |
545,000 |
545,000 |
Bengal |
4,249,300 |
—143,900 |
4,105,500 |
4,105,900 |
N.W.P.
& Oudh . |
3,403,500 |
—250,000 |
3,152,900 |
3,152,900 |
Punjab |
1,370,400 |
348,500 |
1,718,900 |
1.718,900 |
Madras |
2,479,300 |
325,400 |
2,804,700 |
2,804,700 |
Bombay |
3,123,900 |
771,400 |
3,895,300 |
3,895,300 |
The
evil effect of large resumptions and fixed assignments will be clearly seen in the
condition of Provincial Finance as indicated by the annual surpluses and deficits over the
period of the settlement:—
|
Annual
Surpluses or Deficits |
||||
Province |
|
||||
|
1892-93 |
1893-94 |
1894-95 |
1895-96 |
1896-97 |
|
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
C.P. |
—21,798 |
—60,772 |
—105,108 |
19,653 |
—37,408* |
Burma |
66,642 |
—90,653 |
—272,319 |
226,505 |
780 |
Assam |
9,336 |
28,532 |
—27,422 |
30,507 |
—25,421 |
N.W.P.&Oudh
|
—16,752 |
—25,155 |
—165,987 |
—139,798 |
—164,740 |
Bengal |
—9,826 |
36,887 |
169,796 |
149,808 |
—186,558 |
Punjab |
—106,050 |
—22,699 |
—24,811 |
—7,156 |
—64,073 |
Madras |
—159,081 |
33,636 |
92,328 |
44,118 |
—200,579 |
Bombay |
—23,888 |
19,443 |
—102,472 |
100,690 |
—221,119 |
*No
closing balance left.
Complied
from the Annual Finance and Revenue Accounts of the Government of India.
It
must, however, be admitted that the financial arrangements of the Provinces during this
period were considerably disturbed by the outbreak of plague and famine towards the close
of the settlements. The expenditure which the Provinces were obliged to incur to meet
these two calamities depleted the resources of all and brought the Central Provinces and
the North-West Provinces to the verge of bankruptcy, from which they were rescued by the
following contributions made by the Government of India in aid of their balances in the
year 1896-7 :—
To
Central Provinces ...
Rs. 526 lakhs.
To N.W.P. and Oudh
... Rs. 1,609 lakhs.