INDIA. 



385 



a surplus of 119,000, and that the estimate 

 for 1880- '81 would show a surplus of 417,000. 

 These figures, he said, were arrived at in each 

 case after allowing for the payment from the or- 

 dinary revenue of all charges on account of the 

 famine, the Afghan war, and the frontier rail- 

 ways. The total net war expenses to the end 

 of 1880-'81 were estimated, after setting off 

 the increased railway and telegraph revenue, 

 at 5,750,000. The total net expenditure un- 

 der the head of frontier railways during the 

 present and the next financial years was fixed 

 at 3.500,000. The expenditure on produc- 

 tive works had been 3,381,000 in 1878-79, 

 and 3,700,000 in 1879-'80, and would be 

 2,500,000 in 1880-'81, aside from the outlay 

 on the East Indian Railway. The Council 

 bills on India would amount during the present 

 financial year to 15,750,000, and during the 

 next year to 16,900,000. According to the 

 present intention of the Government, no loans 

 would be required during the coming year, 

 unless unforeseen events should occur, but full 

 powers were reserved to borrow in case of 

 need. The closing cash balances at the end of 

 1879-'80 amounted to 14,193,000, and were 

 estimated for 1880-'81 at 11,444,000. The 

 extension of taxation to official and profes- 

 sional classes had been abandoned for the 

 present, and fresh taxation was considered 

 undesirable under existing financial circum- 

 stances. The license-tax, therefore, remained 

 unaltered, except that all incomes below 500 

 rupees would be exempted; the export duties 

 on indigo and lac were abandoned ; no export 

 duty remained on rice ; no change was pro- 

 posed at present in the cotton duties, but the 

 prolonged maintenance of those duties was de- 

 clared to be impossible. Notwithstanding the 

 salt-tax had been reduced in the greater part 

 of India, the revenue from salt, as well as the 

 consumption of the article, had been increased. 

 The measures with relation to the army, recom- 

 mended by the Army Commission, included an 

 estimated annual saving of 1,250,000 which 

 was not credited in the budget. The object of 

 the famine insurance fund had been thoroughly 

 fulfilled. The restriction of the expenditure 

 on productive public works to 2,500,000 had, 

 however, checked the efforts of the Govern- 

 ment to protect the country from famine by 

 the construction of cheap railways and canals. 

 The war estimates had hitherto proved and 

 were believed to be ample for all contingencies 

 at present contemplated. A comparison be- 

 tween the present total net ordinary expendi- 

 ture, compared with that of twelve years back, 

 showed, apart from the loss by exchange, only 

 a trifling increase either in the civil or military 

 charges. 



The bill amending the license acts, the chief 

 feature in which was the exemption of poor 

 traders from taxation, was passed in the Legis- 

 lative Council, March 2d, without opposition. 

 General satisfaction was expressed in the Coun- 

 cil at the condition of the finances ; but some 

 VOL. xx. 25 A 



of the members objected to charging the war 

 expenses upon the revenues of India, and ad- 

 vocated a loan and the abolition of the famine 

 taxation. The Viceroy reviewed the whole* 

 financial policy of the Government, referred 

 especially to the success of the measures which 

 had been adopted for the reduction of taxation, 

 and hoped that further reductions might be 

 effected, and the cotton duties be ultimately 

 wholly abolished. In reply to comparisons 

 which had been made by Mr. Gladstone and 

 Mr. Forster of the expenditures of the last four 

 years with those of a corresponding period un- 

 der Lord Northbrook, he showed that practi- 

 cally no increase in the actual expenditure had 

 been incurred, while the average net revenue in 

 1878-79, and in 1879-'80, had exceeded that 

 of 1868-'69, and of 1869-70, by more than 

 6,500,000. Notwithstanding the reduced tax- 

 ation, the actual charge for interest on the 

 debt had been increased by only 2,500,000 

 during the last forty years; yet, during that 

 period, five provinces with 42,000,000 people 

 had been added to the empire, and the cost 

 of six wars, the suppression of the mutiny, and 

 several great famines, had had to be met. Lord 

 Lytton denied that the proceeds of the taxes 

 for the relief of the famine had been devoted 

 to any other purpose, asserting that the finan- 

 cial object for which this taxation was pro- 

 posed had been accomplished, and expressed 

 astonishment at the charge which had been 

 brought against the Government of concealing 

 the real cost of the war. So far from this being 

 the case, the Government had included under 

 the head of the charges for the war the cost of 

 the frontier rail ways and permanent telegraphs, 

 and other similar items of expenditure. The 

 Viceroy, all the members of the Executive 

 Council, and Sir Ashley Eden, Lieutenant-Gov- 

 ernor of Bengal, opposed the proposal to throw 

 any part of the charges for the Afghan war 

 upon England. 



The measure decided upon by the Army 

 Commission related to the reorganization rather 

 than the reduction of the army, and provided 

 for the formation of four territorial army corps : 

 one for employment in Bengal, Assam, the 

 Northwest Provinces, and Oude ; the second 

 for the Punjaub, the trans-Indus frontier, and 

 advanced posts ; the third for Bombay, the 

 Central Provinces, Central India, Rajpootana, 

 and Sinde ; the fourth for Madras, Hyderabad, 

 and Burmah each to be commanded by a lieu- 

 tenant-general, with a complete staff. By their 

 operation the Commander-in-Chief would lose 

 his seat in the Council, and hold a position 

 toward the office of military secretary similar 

 to that of the Duke of Cambridge toward the 

 British War Department, while the Viceroy 

 would be the supreme head of the army, and 

 the military member of the Council would be a 

 Cabinet Minister in charge of the War Depart- 

 ment. No local army was recommended, but 

 a modification of the short-service system was 

 advised, and the location of European troops 



