THE NATURE OF THE CHANGE 261
( a ) Taxes included in the schedules to the scheduled taxes Rules, or
( b ) Taxes, not included in those schedules, which are imposed by or under provincial legislation which has received the previous sanction of the Governor-General.
Borrowing of money on the sole credit of the Province, subject to the provisions of the Local Government (Borrowing) Rules.
Imposition by legislation of punishment by fine, penalty, or imprisonment, for enforcing any law of the Province relating to any provincial subject; subject to legislation by the Indian Legislature in the case of any subject in respect of which such a limitation is imposed under these rules.
Any matter which, though falling within a Central subject, is declared by the Governor-General in Council to be of a merely local or private nature within the province.
Matters pertaining to a Central subject in respect of which powers have been conferred by or under any law upon a Local Government.
The second task that of allocating the revenue resources between the Central and provincial Governments was a comparatively difficult one. As the problem was conceived in the main as one of making the Provinces independent of the Government of India in matters in which it was proposed that they should acquire an authority of their own acknowledged by law it was natural for the authors of the Report on constitutional Reforms to hold that
“Our first aim……has been to find some means of entirely separating the resources of the Central Government from those of the Provinces.”
The first step in that direction was therefore to abolish the system of “divided heads” or budget by shared revenues, for there was a concensus of opinion that this coparcenary system, in so far as it gave a handle to the Central Government to interfere in the domestic affairs of the Provinces, was a source of friction and was incompatible with provincial independence. But such a system of complete separation was fraught with two main difficulties. The first difficulty was in connection with the disposal