INDIA. 



419 



plus of 850,000. If the 3,000,000 of impe- 

 rial aid were not reckoned in, the estimate 

 would show a large deficit. The fluctuations 

 in the opium revenue, the losses by exchange, 

 and the uncertainty of the harvests, are three 

 elements which render the preliminary esti- 

 mates of Indian finances exceedingly unreli- 

 able. Minister Baring has estimated the opi- 

 um revenue for 1881-'82 at a low figure, in 

 order to be on the safe side, and prevent fur- 

 ther injury to Indian credit by the disclosure 

 of an unexpected deficit. The customs reve- 

 nue he also estimates at a low rate, and calcu- 

 lates that the net loss by exchange will be 

 about 3,063,000. A falling off in the opium 

 revenue of 2,000,000 is allowed for in the 

 estimate. An improvement of 687,000 is 

 expected in the land revenue. The estimated 

 surplus of 1881-'82 is obtained by including 

 3,000,000 of the imperial contribution to the 

 expenses of the war, and the deficit of 1880- 

 '81 is lessened by the amount of 2,000,000 

 from the same source. On the other side, the 

 annual reserve of 1,500,000 for protection 

 against famine is charged against the revenue 

 in 1881-'82 for the first time. The late Par- 

 liament voted an advance of 2,000,000 to the 

 Indian Government without interest to aid it 

 in tiding over the financial difficulty resulting 

 from the war. In 1881 Gladstone carried a 

 motion in Parliament, making this loan a gift, 

 and granting the further aid of 3,000,000, 

 payable in annual installments of 500,000. 

 The whole 5,000,000 have been entered in 

 the Indian financial statements at once. 



In the beginning of 1880 Sir John Strachey 

 estimated the total cost of the Afghan war at 

 less than 10,000,000. Every succeeding esti- 

 mate swelled the amount, and when the ac- 

 counts were finally closed the actual expenses 

 of the war footed up 23,412,000. Of this, 

 4,465,000 is chargeable to frontier railways 

 and military railways in the Punjab. Even 

 with the 5,000,000 of aid from the British 

 Treasury the Afghan war has swallowed up 

 nearly the entire famine fund, 4,035,309 of 

 the famine receipts having been diverted, and 

 9,523,574 of surplus revenue, besides taking 

 from the -cash balances, that is, adding to the 

 public debt, the sum of 4,513,470. 



The scheme of laying aside 1,500,000 annu- 

 ally for provision against future famines was 

 determined upon during the incumbency of 

 Sir John Strachey, and was one of the results 

 of the famine investigation by a parliamentary 

 commission. As stated above, the funds re- 

 served for this purpose for the first four years 

 have been applied to the war expenses. The 

 specified sum, 1,500,000 per annum, will be 

 reserved in the future and included in each 

 year's expenditures. One half of the famine 

 insurance reserve is to be employed in con- 

 structing protective works, and one half accu- 

 mulates into a fund applied in the reduction 

 of the sterling debt. The protective works, 

 which it is proposed to construct first, are the 



Niru Canal, in Bombay; a rail way from Re- 

 waree to Hansee, in the Punjab ; the com- 

 pletion of the line from Bellary to Hospett, 

 in Madras ; a branch line from Hotgi, near 

 Shemlapore, to Bijajore ; and the Betwa Ca- 

 nal, in Bundelcund. The famine insurance 

 fund has been so far dependent only on the 

 license-tax, which diminishes as the public 

 works become profitable. The present plan is 

 to take the specified amount out of the general 

 revenue each year. 



Major Baring in his budget minute shows 

 that the finances of India rest at present on a 

 sound basis, and that the revenue considerably 

 exceeds the expenditure, eliminating the tem- 

 porary drain of the Afghan war. The pros- 

 pects for the future are, however, far less sat- 

 isfactory; for, while the Secretary of State's 

 bills are gradually increasing in amount, the 

 land-taxes, which are the main source of reve- 

 nue, are stationary, and the opium revenue is 

 precarious. The reduction of the military ex- 

 penditure is considered imperative in order to 

 guard against the period of embarrassment. 

 By encouraging private enterprise, the Gov- 

 ernment may improve its own financial condi- 

 tion in promoting the general prosperity. In 

 this direction, it is recommended that the 

 Government should supply its wants by buying 

 in the local markets. This was lately done in 

 the case of harness and accoutrements for the 

 army, and the work the native artisans turned 

 out was neat and durable. The Government 

 has also adopted the policy of seeking to estab- 

 lish commercial relations with foreign coun- 

 tries. Aid was granted to a syndicate which 

 undertook to introduce Indian tea into the 

 Australian and American markets. It is pro- 

 posed to encourage jute and cotton exports to 

 the British colonies in the same way. The en- 

 couragement of railway construction is also 

 urged by the Finance Minister. The policy of 

 the late Government was to have the railway 

 system constructed and maintained by the 

 state. The Liberal administration is desirous 

 that the system should be completed as far as 

 possible by private enterprise, and hopes to in- 

 duce private companies to undertake the con- 

 struction of new lines without the Government 

 guarantee by grants of land and subsidies, with 

 the right reserved to the state of acquiring 

 them by purchase after a certain time. One 

 company has been formed, under the auspices 

 of the Rothschilds, to build a road from Cal- 

 cutta toward Jessore and Koolna. The Gov- 

 ernment have made an arrangement with the 

 Punjab Railway Company by which the guar- 

 antee is only four per cent, and only for the 

 period of construction, and the railroad is to 

 become the property of the state after a period 

 of ninety-nine years. 



The Government expended in the last three 

 years 10,306,273 in the construction of pro- 

 ductive public works. The total cost of the 

 productive public works in four years was 

 26,853,722, and the total receipts 27,626,- 



