THE NATURE OF THE CHANGE 267
foreseen in the Report and investigation by the first statutory commission was promised, but) we propose that a Committee on Financial Relations be appointed, either by you or by us, to advise fully upon the subject, so that each province may know exactly how it stands before the new regime starts.”
And this recommendation was endorsed [1] by the Joint Select Committee of Parliament which sat on the Reform Bill. Accordingly the Secretary of State appointed a Committee under the chairmanship of Lord Meston to advise on :
( a ) The contributions to be paid by the various provinces to the Central Government for the financial year 1921 -22;
( b ) The modifications to be made in the provincial contributions thereafter with a view to their equitable distribution until there ceases to be an all-India deficit;
( c ) The future financing of the provincial loan accounts ; and
( d ) Whether the Government of Bombay should retain any share of the revenue derived from income tax.
After about seven weeks of investigation the Committee produced its Report. [2] In advisinng on clause (a) of its terms of reference the Committee expressed its dissatisfaction of the plan set forth in the Joint Report of taking from the Provinces a fixed uniform proportion of their respective surpluses as their contributions to the Central Exchequer. The principal objection urged against the plan was that in some Provinces it left no surplus and in others no adequate surplus after the payment of their respective quotas of contributions. The Committee held, and rightly too, that
“in no case may a contribution be such as would force the province to embark on new taxation ad hoc, which to our minds would be an unthinkable sequel to a purely administrative rearrangement of abundant general resources.”
The Committee felt itself bound by a limiting consideration in providing the contribution, as a result of which it felt itself obliged
1 Report of the Joint Select Committee on the Government of India Bill (part V, clause 41, para. 9)—House of Commons Return 203 of 1919, p. 12.
2 Report of the Committee appointed by the Secretary of State for India to advise on the question of the Financial Relations between the Central and Provincial Governments in India, pp. Cmd. 724 of 1919, Ch. III.