LIMITATIONS OF PROVINCIAL FINANCE 189
treasury on the ground that the actual cost of any service exceeded the amount at which it was estimated in the calculations of the consolidated grant. [1]
(2) And they were not to make any extra demands on the Imperial treasury, but were bound to maintain from the funds given to them all the services entrusted to their management in a state of administrative efficiency. [2]
With regard to the powers of the Provincial Governments concerning the custody of their funds it was ruled :—
(3) That the funds allotted for their use were to be lodged in the Imperial treasury, and were not to be removed for investment or deposit elsewhere; nor were the provincial Governments competent to withdraw such money except for expenditure upon the public services. [3]
(2) Revenue Rules
Turning from the general limitations to those pertaining to the revenues of the provinces, it should be noted that they were required to maintain themselves within the funds allotted to them by the Central Government at each settlement.
The provinces could not augment their resources beyond the yield due to their natural growth by any possible means, for it was provided that Provincial Governments were—
(i) Not to impose any additional taxation or make any change in the existing system of revenue management. [4]
(ii) Not to alter or augment within its area the rates of discount upon the retail of Stamps, Court Fee labels, and duties on spirits and drugs. [5]
(iii) Not to raise for its own finances any loans in the open market. [6]
Powerless in the matter of augmenting their resources, the Provincial Governments were not free to will them away to any other authority subordinate to them. To guard against such eventualities it was ruled that Provincial Government were—
1 Rule 7 of 1877 and 14 of 1897.
2 Rule7 of 1877 and 14 of 1897.
3 Rule 1 (8) of 1877, 4 (11) of 1897, and 5 (6) of 1912.
4 Rule 1 (1) of 1877 and subsequent Resolutions.
5 Rule 1 (6) of 1877, also embodied in subsequent Resolutions.
6 Rule 5 (13) of 1912. It is surprising that the various resolutions on the subject of provincial Finance prior to 1912 do not contain this ruling, though it cannot be doubted that it has been in operation since the commencement of provincial Finance. In the absence of a specific ruling prior to 1912, attention may be invited to the Resolution reviewing the Financial Statement for 1879-80, where it is said “so long, therefore, as a Local Government does not incur debt ( which is absolutely forbidden ), there is etc., etc.” F. S. 1878, Calcutta, p. 5.