APPENDIX D EXTRACT FROM THE SPEECH OF THE HON. P. M. METHA, C.I.E., AT THE DEBATE ON THE BUDGET IN THE LEGISLATIVE COUNCIL OF THE VICEROY OF INDIA MY LORD, I hope my honourable friend the Financial Member will pardon me for saying that this is really too bad of him. He just gives us a foretaste of better things and then he bids us farewell-a long farewell. Hitherto the financial statements placed before this Council have been comparative accounts of realisations of income, and of growth or saving in expenditure for two previous years, and approximate estimates based upon them for the Budget year. But there was no attempt to go into the heart of things, to discuss the sources of income and heads of expenditure with special regard to the needs, conditions, and circumstances of the country and its varied populations, or to construct a budget, to use the words of a famous Finance Minister, moulded by art on principles of science. The only thing that enlivened the dull monontony of figures in these statements were deep curses at the vagaries of exchange when there was a deficit, and sighs of relief on the elasticity of Indian revenues when there was a surplus. The deeper causes of financial phenomena, or the far reaching indirect effects of financial operations, were left severely to themselves. My Lord, I venture to say that dogmatism on the stability of Indian finance can never be safely indulged till the complexity of the problem is thoroughly investigated and gauged. The several interesting discussions which irradiate my honourable friend's Financial Statement of this year indicate what might have been fairly expected of him if we had succeeded in impounding him for the full term of his office. As it is, he has only succeeded in giving us a taste of the sufferings of Tantalus. When listening to the terse paragraphs, clothed in apt language and sounding almost like judicial summing-up, in which he expounded the currency problem and the 16d. rate of exchange, it was impossible not to wish that he had gone on to furnish us with his views as to whether the measures for securing a stable exchange had cost the country anything and what, whether the deficits owing to exchange were not turned into overflowing surpluses by the difference having come indirectly from the pockets of the people, whether it was not the indirect impoverishment, caused by the stoppage of the mints, which perhaps intensified the inability of the people to stand the strain of the present famine. These are problems which are not only interesting in themselves, but they demand solution before it is possible to come to any useful or positive opinion about the real character and solidity of the existing state and condition of Indian revenues. But the question which I should have liked to have seen dealt with, above all others, is the question whether the financial condition of the country can be regarded as safe if, as is sometimes alleged, land in large provinces is unable to bear the burden that is imposed upon it. Is it true that the effects of famine are hastened and intensified by the decline of staying power in the raiyat owing to over-assessment ? Of course nobody denies what is sometimes so passionately urged, that the immediate cause of famines is failure or scarcity of rainfall. But surely it is possible to conceive that a failure of crops one year does not necessarily involve starvation if there was some balance in hand of past years to tide over the calamity, just as a mercantile firm does not necessarily become insolvent because there have been heavy losses in one year. It is therefore a question of the most vital importance to ascertain whether it is true that there is this want of staying power, and if there is, if it is in any way due to faults in the existing systems of assessing or collecting revenue, if it is due to excess of assessment or rigidity of collection. On more than one occasion I have ventured to draw the attention of the Council to this important topic. That the raiyat is deeply in debt scarcely anyone denies. With regard to the Bombay Presidency, Sir Theodore Hope admitted in this Council that "to our revenue system must in candour be ascribed some share in the indebtedness of the raiyat." The Deccan Agriculturists' Relief Act Commission emphasised this opinion by reporting “that there could be no question that the rigidity of the revenue assessment system is one of the main causes which leads the raiyats of the Deccan into fresh debt." In answering my contention on this point on the first occasion, Sir James Westland replied that the only opinion I could cite was the opinion of a very distinguished official who retired eighteen years ago. When, on the next occasion, I pointed out that the still weightier and more matured opinion of the Commission was not eighteen years old, Sir James said "that as the revenue officers had admittedly powers of remission and suspension, it must be assumed that if they did not exercise them, there was no need to do so." The answer to this is simple. These powers existed in Sir Theodore Hope's time and when the Commission made its inquiries. And, in spite of that, both these authorities, mostly official, arrived at the conclusion that rigidity of the revenue system was undoubtedly one of the causes of the raiyat's indebtedness. With regard to the question of over-assessment, it must be remembered that it is not simply a question of absolute excess of assessment, but also whether the assessment leaves a sufficient margin for saving. As was pointed out by Mr Cotton, "if a bare margin for subsistence alone remains, the result is that indebtedness extends year by year, and famines recur with ever-increasing severity." In one of Sir Louis Mallet's minutes on Indian land revenue, he lays stress upon "the marked absence of any adequate accumulation of capital upon the soil, and (as a consequence) of any sufficient appropriation of such capital to purposes of agricultural improvement, deficiency of stocks, of manures, often of seeds and implements," as tending directly to a progressive pauperisation of the raiyat. That these opinions cannot be altogether scornfully rejected is painfully brought home to every student of the question by a perusal of the Selections, issued from time to time by Government, of papers relating to the periodic surveys and settlements of talukas. It is evident that re-settlement is carried out in a most empirical fashion, without being regulated by wellascertained and definite principles. A writer well acquainted with the matter has described the procedure of revision operations as follows. The Settlement Officer surveys the lands and generally discovers some under-measurements. A fallow piece of land here, or a rocky stretch there, or a marsh at another place, reclaimed at some cost and labour-all such attract his attention, and the measurements are thus increased. Then he proceeds to register his reasons for enhancements. There is a railway newly built in the neighbourhood, there is an increase in the number of tiled houses and of cattle, there is a new bazaar begun to be regularly held, there is a school and children, and so on, and so on, till everything is included which by hook or crook can show that prosperity has increased. It is said that even sending delegates to the Indian National Congress has been used as an argument for a revision of the Settlement. Then comes the mention of any canals or tanks built by Government, and of the fact, if it exists, of water being found at a certain level by some raiyats who had been fools enough to dig wells. There is hardly an attempt to inquire whether the farmers themselves have shared in this outward prosperity. Then there is a speculation and perfunctory inquiry as to the general yield, and the end of it is a recommendation for generally raising the assessment rate from fifty to two hundred per cent. at one sweep. It will be thus seen that, however conscientiously pursued, these >perations are in their very nature empirical, uncertain, |