COMMISSIONS to report and committees
to enquire are a peculiar feature of the English system of government. It is a
cardinal principle of English Parliamentary action that in the matter of social
and economic legislation it never takes a leap in the dark. Committees and
commissions are necessary preliminaries of an Act of Parliament. In this it
follows the well-known maxim that knowledge is power. One is happy to find that
this principle of English Parliamentary action has been followed in India and
our politicians, who so often oppose the
appointment of Commissions and Committees, cannot be said to be acting in the
best interests of the country.
In the case of the Taxation Enquiry
Committee, however, it was the Government which was trying to shut it out and
when it did institute an enquiry, it was not the one demanded by the Assembly.
What the Assembly wanted was an Enquiry into the taxable capacity of the people
and this the Government did not want to face for fear that such an enquiry might
reveal that the burden of taxation upon the people was disproportionate to
their taxable capacity. But when public opinion insisted upon the institution
of such an enquiry, it, by a species of circumvention, split the enquiry into
two parts : (1) The taxation Enquiry Committee and
(2) The Economic Enquiry Committee, with the result that the utility of either
committee's report has been considerably diminished.
The terms of reference to the Taxation
Enquiry Committee directed it (1) to examine the manner in which the burden of
taxation is distributed at present between the different classes of the
population ; (2) to consider whether the whole
scheme of taxation is equitable and in accordance with economic principles,
and, if not, in what respects it is defective ; and
(3) to report on the suitability of alternative
sources of taxation. In making its Report, the Committee has not been very
judicious in the allotment of space to the consideration of these three
questions. The first was evidently the most important of the three heads comprised in the whole charge. Yet the space devoted
to the consideration of it barely covers 13 pages in a volume of 447 pages. Besides the treatment of the subject is far from
satisfactory. The Committee without giving any reason whatsoever divided the
population of the country in 11 classes and has discussed the burden they bear
in 10 pages and a half without at all touching upon the most important of all
questions, vis., the incidence of the individual
taxes imposed under the
Indian fiscal system. Now one would have liked to know why did the Committee
think that 11 was an exhaustive classification ? If
it is just a question of may be, then why not 13 ? Again,
how can the Committee at all say what is the burden that a merchant bears ? If they had examined the incidence of individual
taxes, they would have perhaps found that he bore none !
Take again, another specific instance, that of the Cotton Excise Duty. The
Committee has no difficulty in saying that its abolition will benefit the working classes. But is the Committee
quite certain that it was shifted on to the consumer ?
I do not at all wish to be unfair to the Committee. But I am bound to say that
in this respect the Report of the Committee is a most disappointing document. The
Committee has devoted a great deal of space to the detailed history of the
various sources of taxation in India. So far so good. But it would have been
far better if the Committee had devoted half of that space in discussing the
incidence of each tax separately. But this the Committee has entirely omitted
to do. If that was done, the Committee would have been in a better position to
deal with the question of the distribution of the burden of taxation and of the
elimination of the iniquitous taxes. That it has not been able to do as well as
was to be expected from a Committee which has cost the country nearly Rs. 4 1/2 lakhs exclusive of printing is due to the
fact that it forgot to consider the question of incidence, which, after all,
was the most important part of its enquiry.
This failure of the Committee to tackle the main problem is to be attributed primarily to the personnel of the Committee, which was largely of inexpert people, most of whom, if rumour be true, began to learn the A.B.C. of Punjab Finance after they found themselves nominated on the Committee. There is no wonder if the report emanating from such a body falls flat upon students of the subject. One thing, however, can be said in favour of the Report. It is a document full of common-sense, neatly arranged. If it can not satisfy the student, it will certainly serve as a base for his intellectual operations. Some of the proposals of the Committee I hope to examine in subsequent articles. For the present I propose to stop with this statement of my view on the Report in general.
[f1]The servent of India.vol IX, no.13,
april29,1926 pp.163-64