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FINANCIAL CHECK. 2224. I think I am right in saying that in many respects the Financial Member stands alone as against the whole of the other Members of Council, în respect that he is the one to furnish funds, and the others want to spend funds ?

That is the case, of course; that is necessarily the case. The different departments want money, and he has to keep some check upon them, if he can.

2225. So that, though he may be stronger in his department individually as against any particular department, he is not strong enough to resist the whole of the Council ?

He cannot resist the majority.

2226. And the general feeling is that he has got to provide the funds for the necessary requirements of the others, so that he finds himself rather in antagonism with the general feeling of the Council ?

Of course he must have continual controversies going on as regards particular items of expenditure; that is inevitable.

2227. And therefore, supposing the Viceroy is inclined to some military operation, and the Military Member of the Council is not actively opposed to the Commander-in-Chief, there would be at once a very large majority against the Financial Member?

Oh, yes, of course.

2301. And in the whole arrangement of the Budget and of expenditure the Indians themselves have no voice whatever ?

Of course they have no direct and immediate voice; but there is no doubt that the Government of India does pay a certain attention to public opinion in India; every Government does.

2302. But they have no direct voice in the matter ? No direct voice as far as I can see.


17,783. Looking at the evidence you have given us on the increase of expenditure generally, may I ask you whether you have arrived at any conclusions on the strength of the facts as stated, which you would like to place before us?

From the foregoing examination of the progress of expenditure, it will be evident to the Commission

(1) That the financial embarrassments which prevailed during the decade owe their origin principally to the enormous growth of military expenditure, which has led to the imposition of additional taxation, which now amounts, including the customs duties on cotton goods, to nearly 6 crores (four millions sterling).

(2) That the growth in civil expenditure is also very considerable. But so far as this is concerned there is not much cause of complaint save in one respect, namely, that the costly foreign agency absorbs a large portion of the revenue which could be considerably saved if there was more extensive employment of Indians in the higher grades of the administration. It may be observed that adequate civil expenditure of a productive character is much to be desired. I mean such as gives the taxpayers a fair quid pro quo, such as education for the masses, more efficient administration of justice, greater village and town sanitation, and all other works of public utility which contribute to the expansion of provincial resources and prosperity of the people.

(3) That the burden or exchange might have easily been borne, without resort to fresh and enhanced taxation, had the military expenditure been on the basis of 1884-5.

(4) That a similar growth, if allowed to go unchecked

in future, is liable to plunge the Government into fresh embarrassments, leading to further taxation, which is neither desirable in the interests of good and stable government, nor in the interests of the people, among whom there prevails sullen discontent, inasmuch as their capacity to bear further burdens has been greatly crippled. The Secretary of State writes imperative despatches for strict economy, and for exercising utmost care in public expenditure, for the danger of increasing the burdens of taxation has to be borne in mind. (Vide Despatch of 12th April 1888, vol. ii., Appendix, p. 141; Despatch of 3rd November 1892, vol. ii., Appendix, p. 154.)

These warnings seem to fall on deaf ears, and Secretaries of State do not enforce what they enjoin, and the despatches only remain pious intentions. At any rate, the Commission must have noticed how, in spite of them, expenditure has grown apace. Since 1892 taxation to the extent of about 3 crores (two millions sterling] has been added, while the military activity beyond the frontiers was even greater in consequence of the acquisition of Gilgit, which ultimately led to the occupation of Chitral at a cost of it crore [one million sterling], and with a permanent annual charge of 25 lakhs [£166,000). The State Secretary himself is a silent or originating party to this kind of expenditure, so that it may be truly observed that the despatches are practically of no effect, and that both the Secretary of State and the Government of India must be held equally responsible for that expenditure.

It is a well-known fact that India has no true surplus to speak of. It lives at the best from hand to mouth, and is oftener than not in a condition of embarrassment from which it relieves itself only by windfalls or borrowing or by enhanced taxation which every time that it is imposed diminishes the capacity of the taxpayer, whose income does not exceed Rs. 27 (36s.] per annum.

From 1849-50 to 1894-5 there has been a net deficit of 37.62 million Rs. [twenty-five millions sterling). In other words, during the forty-six years, Indian finances have exhibited an annual deficit of Rs. 800,000 [£ 533,000] on an average. The most essential fact seems to have been invariably lost sight of, that India is made a poor country by the “bleeding " it has been subjected to, and can, therefore, have but a poor revenue. That a system of administration, however well-meaning, which takes no cognisance of this essential fact, but goes on adopting a western system of Government, a system of alien Government in which the people have no voice, and which is besides known to be costly, must in the long run end in financial disaster, however long it may be in coming in. I go further and say it is a system unnatural and foredoomed to failure. Under the circumstances Indians cannot but view with the gravest apprehension any further increase of expenditure.



18,331. I think you were going to offer some observations on the services.

Yes. In every department of Indian expenditure the question of agency is one of paramount importance. According to a Parliamentary return of May 1892, we have in India in the higher branches of the civil and military departments a total of 2388 officers drawing Rs. 10,000 a year and upwards, of whom only sixty are Natives of India, and even these, with the exception of such as are Judges, stop at a comparatively low level. And they are thus divided. (See table on next page.)

In addition to these the railway companies employ 105 officers, drawing Rs. 10,000 a year and more. They are all Europeans, and their total salaries come to 16 lakhs 28 thousand rupees. If we come down to officers drawing between Rs. 5000 and Rs. 10,000 a year we find that we have 421 Natives in the civil department,

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as against 1207 Europeans and 96 Eurasians. In the military department there are 25 Natives, as against 1699 Europeans and 22 Eurasians. In the public works department there are 85 Natives, as against 549 Europeans and 39 Eurasians. And in the incorporated local funds there are 4 Natives, as against 22 Europeans and 3 Eurasians. The total salaries of officers of this class are thus divided :-Civil Department: Natives, Rs. 2,905,000; Eurasians, Rs. 650,000; and Europeans, Rs. 8,830,000. In the Military Departments: Natives, Rs. 164,000; Eurasians, Rs. 139,000; and Europeans, Rs. 13,698,000. In the Public Works Department: Natives, Rs. 537,000; Eurasians, Rs. 278,000; and Europeans, Rs. 3,962,000. And in the Incorporated Local Funds: Natives, Rs. 25,000; Eurasians, Rs. 17,000; and Europeans, Rs. 146,000. In addition to these there are, under the railway companies, 258 officers of this class, of whom only 2 are Natives, 8 being Eurasians, and 248 Europeans. Their salaries are thus divided : Natives, Rs. 12,000; Eurasians, Rs. 50,000; and Europeans, Rs. 17,100,000. In England £125,360 is paid as salaries by the Indian Government, and £54,522 by railway companies, all to Europeans. The financial loss entailed by this practical monopoly by Europeans of the higher branches of the services in

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