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and labour which so sudden and simultaneous an expenditure throughout India must inevitably produce.

“The figures already embodied in this report show how few of the most carefully examined irrigation schemes have proved remunerative, and these returns are more than confirmed by Sir Arthur Cotton himself, who, in reply to a question asking him to indicate what works constructed by the Government of India during the last twenty years, other than those in the Madras Delta, had proved remunerative, replied, “None of the great works pay yet' (Question 2214).

"It is evident to your Committee that this scheme, though of gigantic dimensions, is of too shadowy and speculative a character to justify their noticing it, except for the purpose of emphatically rejecting it.”

It will appear from these extracts that the Select Committee singled out the Madras Deltas as the only remunerative works; and that, from their narrow point of view, eveu the Ganges and Jumna works, which had increased the prosperity of the people, prevented famines, and saved the land revenues from loss in years of drought, were not remunerative.

It is worthy of note that shortly after Lord George Hamilton's Committee had come to this decision, the Madras Famine Commission commenced its inquiries in a more thorough and systematic manner in India and in • England. And the Famine Commission came to a conclusion diametrically opposite to that of Lord George Hamilton, both as regards the immediate returns, and the broad results of irrigation works. “The result has been,"

so the Famine Commission wrote in respect of irrigation • works,“ a great advantage to the State, regarded merely

from the direct financial return on the money invested ; and apart from their value in increasing the wealth of the country in ordinary years, and in preventing or mitigating famine in years of drought.” 1 1 Famine Commissions Report, 1880.

And the people of India—those who paid the cost of railways and irrigation works alike-would undoubtedly have given their support, if they had been consulted, firstly, to Sir Arthur Cotton's proposal to stop the further extension of State Railways and Guaranteed Railways, after the main lines had been completed, and secondly, to the construction of carefully considered irrigation works for the benefit of cultivation and the prevention of famines. Sir Arthur Cotton's plans undoubtedly were “shadowy and speculative”; for schemes drawn up in London, even by a man of his genius and Indian experience, must be only tentative in their nature. But a close and careful examination would have shown us how far these schemes were practicable, and were likely to be beneficial. And the construction of such useful works, twenty-five years ago, would have averted the worst effects of the famines of the last years of the century. But Lord George Hamilton's Committee had given their verdict; and the occasion created by Sir Arthur Cotton's foresight and John Bright's large-hearted sympathy passed away, not to return again within the century.

CHAPTER X

FINANCE AND THE INDIAN DEBT

The system of presenting the annual accounts underwent alterations from time to time, between 1858 when the Queen took over the direct administration of India, and 1877 when she assumed the title of Empress of India.

In the accounts presented to Parliament for 1859-60, the interest on guaranteed railway capital was for the first time shown as a charge on the revenues of the year.

In 1867-68, the policy of constructing large “ Productive Works” with borrowed money, and of excluding the capital so borrowed from the ordinary revenue and expendițure accounts, was sanctioned. It was by such exclusion that a surplus was shown in the accounts under Lord Mayo's administration. The capital borrowed was shown under the heading of Debt for Productive Public Works; and the interest on the debt was shown in the ordinary revenue and expenditure accounts.

In 1870-71 the system of allotting to the different Provincial Governments certain grants of money, with the responsibility of meeting therefrom certain charges, was inaugurated under Lord Mayo's decentralisation scheme. In that year the only financial effect was an advance of £200,000 to provide those Governments with a working balance. But from 1871–72. to 1875-76 certain receipts, estimated at about £650,000, were deducted from the expenditure, and both sides of the account were reduced 'to that extent; while expenditure to the amount of £ 500,000 was shown in a lump sum as Allotments for Provincial Services.

From 1871-72 the statement of Nett Income was

abandoned; revenues were shown in the gross, and expenses of collection were included in the expenditure.

From 1876–77 the system of showing the Allotments to Provincial Governments was altered. Instead of one sum being shown as Allotments to Provincial Services, the receipts and expenditure were exhibited in detail under the proper headings. From the same year also, the annual revenue from Productive Public Works, and the annual charge for interest and working expenses in connection with them, were shown.

From 1877–78 a new heading of Provincial Rates was introduced, under which were entered the receipts from the special taxation iinposed upon land in 1877. A further change was made in the following year by bringing into the general revenue account all the Local Funds previously accounted for separately, a corresponding charge being entered under various headings on the other side.

The figures on the next page, showing the revenues and expenditure of India during the nineteen years which elapsed from 1858-59 to 187677, are taken from the Statistical Abstracts for India annually presented to both Houses of Parliament. Under the head of revenue we show the Land Revenue separately; and under the head of expenditure, we exhibit separately the portion of it incurred in England.

It will appear from these figures that the gross revenues of India increased from 36 millions to 51 • millions in eighteen years, i.e. by the end of 1875–76; and the portion of it spent in England, i.e. the Home Charges, increased within the same period from 71 millions to 10 millions. :

Then followed the eventful year, 187677, when · there was a decrease of Land Revenue on account of

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i Henry Waterfield's Memorandum on Changes made in the form of the Accounts, dated April 20, 1880. The official year ended on the 30th April up to 1866. It ended on the 31st March from 1867. Therefore the figures for 1866–67 in the table on the following page are for eleven months only, ist May 1866 to 31st March 1867.

Year.

Land
Revenue.

Gross
Revenue.

Expenditure
in England.

Gross Expenditure.

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51,056,930 51,861,720 48,154,087 44,870,232 44,053,122 44,982,006 46,450,990 47,332,102 44,639,924

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19,986,640 48,534,412
19,926,171 49,262,691
21,088,019 50,901,081
20,622,823 51,413,686
20,520,337 50,110,215
21,348,669 ¡ 50,219,489
21,037,912 49,598,253
21,296,793 50,570, 171
21,503,742 51,310,063
19,857,152 : 55,995,785

7,466,136 7,239,451 7,745,848 7,624,476 7,252,317 6,894,234 6,998,770 6,211,178 7,545,518 8,497,622 10,181,747 10,591,013 10,083,004

9,850,912 10,547,908 10,265,557 10,604,994

9,898,683 13,467,763

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the Madras famine. The somewhat sudden increase in the figures, representing the gross revenue and the gross expenditure of that year, is due to the inclusion in the accounts of the receipts and charges for interest in connection with Productive Works, as has been already explained. The whole of the nett railway receipts is shown on the revenue side from that year; and the whole of the Guaranteed Interest and Profits paid to Companies is shown on the expenditure side.

The total Debt of India just before the Mutiny in 1856-57 was 591 millions, and in the following year it rose to 694 millions sterling. As the whole charge of the Mutiny wars was thrown on India, the Public Debt rose in 1860 to over a hundred millions. And as the construction of railways was undertaken by the State after the Guarantee System was abandoned, and railway lines were recklessly extended with borrowed capital, the Public Debt rose rapidly from 1870.

It is necessary to explain that the figures for

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