Indian Nationality

CHAPTER IX

INDIAN NATIONALITY AND FEDERALISM

ONE question still remains to be touched-the future organisation of the Indian Government. At present the Government of India is organised centrally, though the existence of both provinces and Native States makes it appear like a federal union. The organisation of the Government on the lines of the Montagu-Chelmsford Report, in spite of the fact that the Report itself rejects federalism, will make India more like a federal union than any other form of government in existence.

The normal pre-requisites of federalism are practically the same as those for nationality-unity in territory, language, political sympathy, common interests and ideals. Such unity may co-exist with certain local differences, but the differences in all cases must be such as not to endanger the unity. Granted, therefore, a prevailing desire for unity on a given territory, even though that desire may be marked by local varieties of thought, language and organisation, we may expect a federal form of government to be successful.

These normal pre-requisites in a rough way exist in India. Geographically India is a unit; there is a prevailing desire for Indian unity; and there is a common language. But along with these exist many differences. Though the provinces of India are organised primarily for administrative ends, they at the same time roughly coincide with racial or linguistic areas. Bengal, the most composite province of all, has a preponderating population of Bengalis, with 92 per cent. of the population speaking

the Bengali language. The most marked element of difference is religion; there is almost an equal division between Mohammedans and Hindus (to be exact, 52.2 and 452 per cent. respectively). This religious cleavage is almost universal in India, but generally speaking in other matters the provincial boundaries mark off distinct types of people and language. In some administrative units the chief factor in fixing boundaries has been administrative convenience, as in the North-West Frontier Province, but even where that has been the chief determinant, there exists as a rule a certain type of national or sub-national character. How strong the sub-national bond may be was seen in the anti-partition agitation in Bengal, where administrative convenience was beaten in a severe fight with nationality.

I have already quoted Sir Henry Cotton's vision of a future United States of India, but his remarks suggest local independent states as much as a federal union. The idea of local independence finds no voice in India itself. 'Bengal for the Bengalis' and similar maxims have been recognised to a certain extent by Government, particularly in Government provincial services, but the Government policy is not anti-Indian. India in this respect may aptly be compared with either Switzerland or Germany, where in perfectly successful federal unions there are distinct local varieties of people and government.

One of the chief benefits of the federal form of government is that it provides a unity where without it there might be independent states. In India at present the government is centralised, with a great deal of provincial devolution. The Decentralisation Commission and the Montagu-Chelmsford Report both insist on the necessity of Provincial devolution, but the latter Report does not recognise such devolution as amounting to federalism. The actual course of devolution has been marked by an appreciation of federal principles, particularly in the creation of provinces, each of which as far as possible contains its own people and its own language.

There is no essential difference in an organisation arising from a foedus or agreement and one created by a central government. The best known federal unions of the world comprise both types. The United States, the most perfect example of federalism, arose mainly by the pact process, but Brazil and Mexico are federal unions because a hitherto unitary government made them so. The Brazilian federation resulted from the process of dethroning Dom Pedro and proclaiming a United States of Brazil, a process ratified later by the constituent assembly in 1890. The Mexican constitution was adopted in 1857 on the model of the United States constitution simply as a method of organising Mexico. Even in the United States the modern form of union was completed by force, and the same is true of Germany. The method of creation, whether evolution or devolution, is not the essential point in federalism.

Federalism as an organisation demands:

(a) Constitutional powers for the central government and the local governments-such powers being as definite as human language can make them.

(b) The supremacy of the constitution.

Obviously where there are to be provincial and central governments each must have its own powers, and the constitution which demarcates those powers must be greater than either of the governments. What is the case in India?

In India up till now we have had a central government whose will (along with that of Whitehall) has given, or withheld, powers to the provincial governments. The centralised authority of the Government of India has been particularly prominent in financial matters, and as financial considerations determine the work of all departments, it is necessary to look into the financial relations of the central and local governments somewhat more closely.

In the early days of British government in India the three Presidencies were practically self-contained. In 1833 the Governor-General was given certain powers over Madras and Bombay, particularly in financial matters. This system, which made the central government supreme in financial affairs, save for small local cesses for roads and such-like, lasted till 1871. Local governments were financed directly from the purse of the Government of India. Even the smallest matters involving expenditure required sanction from the central government. With the growing functions of both governments such a system became ludicrous. The Government of India could interfere in the smallest matters of local concern and question every decision of the authorities on the spot. Naturally there was considerable friction. Not only so, but the provincial government that made most noise got most money. No motive for economy existed when the provinces could spend other people's money.

After many complaints from government secretaries, Lord Mayo took up the question in 1870-1. He settled certain standards of provincial income and allowed the provinces to manage matters for themselves within these limits. The weak point of Lord Mayo's settlement was that he gave little room for expansion to the provinces. This point was taken in hand by Lord Lytton's Finance Minister, Sir John Strachey, who, in the financial settlement of 1877-8, gave provincial governments powers to collect certain heads of revenue as well as to spend them to a given limit. The next steps were taken by Lord Ripon and his Finance Minister, Baring, who afterwards became Lord Cromer. In 1882 the first real advance towards federal finance was made. The Ripon-Baring settlement granted the whole product of some sources of revenue to provincial governments and a share in the product of other heads, including land revenue. Military receipts, customs, opium, salt, postal receipts and tributes were in the main allocated to the central government. Receipts by civil departments and from provincial public

works were mostly given to provincial governments. Where the division between provincial and central was against the provinces (and the divided heads were in equal proportions between the two) the provinces were to recoup themselves from the land revenue. In 1882 both war charges and famine expenditure were allocated as between central and provincial. War charges were to be paid by the central government (save in case of abnormal disaster, when the central government might have to call on the provincial governments to help), and the central government made a promise to take definite action in severe famines, to obviate the necessity of provincial governments keeping reserves for famine years.

During the next twenty years, owing to the fluctuations in provincial budgets caused by the abnormal expenditure of the Afghan wars, no great alteration was made. The Government of India guaranteed a minimum balance for each local government. Till 1904, with its quasi-permanent settlements, there were several departmental revisions of central and provincial expenditure, but the federal principle of Lord Mayo remained. By the quasi-permanent settlements the revenues assigned to a provincial government could not be altered by the Government of India save for Imperial exigencies, or if the limits set should prove unsatisfactory. The results of this settlement gave some of the real essentials of federalism to India. These results, in the main, were:

(a) That the Government of India retained in its own hands certain administrative services, the revenue derived from them, and a share of other revenues sufficient to meet their needs;

(b) The remaining administrative services were handed over to the provinces, each provincial government receiving a source of income independent of the needs of the central government;

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