288 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
plan of distribution in order to leave each Province with a sufficiently large “spending power” or surplus. That the plan recommended by the Committee was calculated to bring about such a result must of course be taken for granted. But when we analyse the Budgets of the different Provinces since the introduction of the Reforms the result appears to be entirely disappointing (see Table, p. 287).
Thus, taking the estimated revenue and expenditure of the nine Provinces for 1922-3, equilibrium between current revenue and expenditure is only to be found in two of them, Burma and Bengal, and in the latter this result could not have been attained but for the temporary remission [1] of its annual contribution to the Central Government, and a programme of taxation calculated to bring in Rs. 140 lakhs. In the rest of the Provinces the deficits of the year aggregated to the large figure of Rs. 7,74 lakhs. This huge deficit was financed by new [2] taxation to the extent of Rs. 3,52 lakhs, and for the rest by drawing on balances and by raising loans from the public and from the Central Government. But as the Secretary of State in his despatch [3] pointed out, this
“process of financing provincial deficits in part from the accumulated revenue balances of the past will now practically come to an end, as such balances will be generally exhausted by the end of the current financial year ............ If the financial stability of the Provinces is not to be undermined, with ultimate jeopardy to the Government of India itself, it is impossible to contemplate the continuance of a series of Provincial deficits financed by borrowing either direct from the public or from the Central Government.”
What is to be the remedy ? At the Conference held in Simla in April, 1922, “to consider various matters connected with the financial arrangements between the Central Government and the Provinces,” it was disclosed [4] that the Government of India and the Provinces were divided as to the proper solution for the rehabilitation of Provincial Finance on a stable and secure
1 Legislative Assembly Debates, Vol. Ill, No. 8.
2 Cf. the letter of the Government of India, Finance Department, No. 13 of July 13, 1922, to the Secretary of State.
3 Cf. the despatch in reply to the above by the Secretary of State (Financial), No. 17 of November 9, 1922.
4 For a summary of the result of this Conference, see Letter of the Government of India, supra, p. 257.