z:\ ambedkar\vol-02\vol2-08.indd MK SJ+YS 21-9-2013/YS-8-11-2013 635
IN THE FEDERAL STRUCTURE COMMITTEE 635
Government, nor can one understand the reasons which led the SubCommittee to recommend that the States should not be required to pledge their revenues in support of Federal loans.
Now, Lord Chancellor, in ceremonial matters a discrimination between the Provinces and the States may be permitted. We may refuse to ourselves the honour of the salutes, and we may let the States have what they want in respect of that; but when it is a matter of the purse, I think we ought to follow the maxim that “business is business”. If British India is making a sacrifice in the interests of Federation, it has an equal right to call upon all the other Units to make equal sacrifices in the interests of Federation; and I therefore urge that the following amendments to this part of the Committee’s Report be made : —
(1) That the States must accept the right of the Federal Government to “direct” taxation. Until this is done there should not be remission of cash contributions and no consideration of ceded territory.
(2) A time limit should be fixed within which the States should be required to abolish their internal Customs by an appropriate change in their fiscal system which shall not injuriously affect the fiscal system of the Federal Government.
(3) The States must be required to pledge their revenues as security for Federal loans.
That is all I have to say, Lord Chancellor, on this matter.
Thirty-eighth Sitting—22nd October 1931
HEAD 4
( Distribution of Financial Resources between the Federation and its Units )
Discussion on the Report of the Federal Finance Sub-Committee
*Dr. Ambedkar: I should just like to say one thing. Lord Peel said just now that there was general agreement regarding the principles enunciated in the Report of the Federal Finance Sub-Committee. Now, whatever may be the view of the other members of the Federal Structure Committee, I should for myself like to make this reservation, that I certainly do not agree with the principles enunciated by the Federal Finance Sub-Committee ; and I should for myself like to say that I have no objection to the appointment of this Committee, provided it is distinctly understood that the Committee has a right to suggest alterations and amendments of the principles, in order that the future financial system for the Federal Government may be a sound system.
HEAD 8
( The Federal Court )
† Dr. Ambedkar: Lord Chancellor, it seems to me that, in considering the
*Proceedings of the Federal Structure Committee and Minorities Committee, Vol. I, p. 685.
† Ibid., pp. 689-702.