admini

EXCISE DUTIES in India are not a mere tax levied through Excise the private manufacturer and retailer, but (like salt) a species stration. of Government monopoly. The only excisable articles are intoxicants and drugs; and the object of the State is to check consumption, not less than to raise revenue. The details vary in the different Provinces, but the general plan of administration is the same. The right to manufacture, and the right to retail, are both monopolies of Government, let out to private individuals upon strict conditions. Distillation of country

spirits is permitted under two systems—either to the highest bidder under supervision, or only upon certain spots set apart for the purpose. The latter is known as the sadr or central distillery system. The right of sale is also farmed out Distillery to the highest bidder, subject to regulations fixing the quantity system. of liquor that may be sold at one time. The brewing of Rice-beer. beer from rice and other grains, which is universal among the hill tribes and other aboriginal races, is practically untaxed and unrestrained. The European breweries, recently established at several hill stations, pay a tax at the rate of 6d. a gallon.

Excise duties are also levied upon the sale of a number of intoxicating or stimulant drugs, of which the most important are opium and gánjá or bhang. Opium is issued for local Opium. consumption in India from the Government manufactories at Patná and Benares, and sold through private retailers at a monopoly price. This drug is chiefly consumed in Assam, Burma, and the Punjab. Gánjá is an intoxicating preparation Gánjá. made from the flowers and leaves of Indian hemp (Cannabis sativa, var. indica). The cultivation of hemp for this purpose is almost confined to a limited area in Rájsháhí District, Bengal, and to the inner valleys of the Himálayas, whence the drug is imported under the name of charas. Its use is a fre- Charas. quent cause, not only of crime, but also of insanity. Government attempts to check consumption-first, by fixing the retail duty at the highest rate that will not encourage smuggling; and second, by continually raising that rate as experience allows. Strictly speaking, gánjá consists of the flowering and fruiting heads of the female plant; bháng or siddhi, of the dried leaves and small stalks, with a few fruits; while charas is the resin itself, collected in various ways as it naturally exudes. No duty is at present levied upon tobacco in any part of British India. The plant is universally grown Tobacco. by the cultivators for their own smoking, and, like everything else, was subject to taxation under native rule; but the impos

Municipal administration.

The old

of Five.'

sibility of accurate excise supervision has caused the British Government to abandon this impost.

The municipalities at present existing in India are a creation of the Legislature; indeed, a recent branch of our system of administration. Their origin is to be traced, not to the native panchayat, but to the necessity for relieving the District officer from some of the details of his work. The panchayat or elective Council of Five is one of the institutions most deeply rooted in the Hindu mind. By it the village community was ruled, the head-man being only the executive official, not the legislator or judge; by it all caste disputes were settled; by it traders and merchants were organized into powerful guilds, to the rules of which even European outsiders have had to submit; by it the Sikh army of the khálsá was despotically 'governed, when the centralized system of Ranjit Sinh fell to pieces at his death. But the Hindu village organization had been broken up under Mughal rule. Police, roads, and sanitation are the three main objects for which a modern Indian municipality is constituted. In rural tracts, these departments are managed (in different Provinces) by the Collector, or by one of his subor dinate staff, or by a Local Fund Board. Within municipal limits, they are delegated to a Committee, who practically derive their authority from the Collector's sanction, implied or expressed. Except in the great towns, the municipalities can scarcely be said to yet exhibit the attributes of popular representation or of vigorous corporate life. However, as education advances, and with it the desire and capacity of self-government, the municipal committee will doubtless form the germ from which free local institutions will in the future be developed. In Municipal 1876-77, excluding the three Presidency capitals, there were statistics. altogether 894 municipalities in British India, with 12,381,059

inhabitants, or just 7 per cent. of the total population. Out of an aggregate number of 7519 members of municipal committees, concerning whom information is available, 1794 were Europeans and 5725 natives; 1863 were ex-officio, 4512 nominated by Government, and 1144 elected, the last class being almost confined to the North-Western and Central Provinces. The financial statistics of these municipalities are given at p. 361. The three great municipalities in the Presidency towns of Calcutta, Madras, and Bombay administered a population in 1877 of 1 million. Their governing bodies aggregated 176 members, of whom 122 were natives. Eighty of the members were elected by the ratepayers.

finance.

scurities

FINANCE. -It is difficult to present a view of Indian Imperial finance, which shall be at once concise and intelligible. The subject is full of controversies and is obscured by ambiguities. In the first place, the aggregate revenue and expenditure are officially returned according to a system which, although necessary for purposes of account, is apt to mislead the English critic. The Indian Government is not a mere tax-collecting agency, charged with the single duty of protecting person and property. Its system of administration is based upon the view Its ob that the British power is a paternal despotism, which owns, in a certain sense, the entire soil of the country, and whose duty it is to perform the various functions of a wealthy and an enlightened proprietor. It collects its own rents; it provides, The 'busi out of its own capital, facilities for irrigation, means of communication, public buildings, schools, and hospitals. It also Governtakes on itself the business of a railway owner and of a manu- ment. facturer on a grand scale, as in the case of opium and salt. These departments swell the totals on both sides of the balance-sheet with large items, not of the nature of taxation or of administrative expenditure.

ness' of the Indian

of account.

In the second place, the methods of keeping the Indian Changes public accounts have been subjected to frequent changes during in system recent years, to such an extent as to vitiate all comparative statements for long periods of time. The commercial traditions, inherited from the days of the Company, regulated the Indian accounts until about the year 1860. From that date efforts have been made to bring the system of Indian accounting into conformity with that of the English public accounts. It results that the same entries represent different facts at different periods. Thus, under the Company, the items usually represented the net sums; they now represent the gross sums. At one period, the gross receipts are shown, with a per contra for the charges of collection or for refunds. At another time, important classes of charges have been transferred from the Imperial to the Provincial Budgets, to be brought back again after an interval of a few years to the Imperial Budget, and again transferred to Local Finance. Capital expenditure on public works, at one period charged to current revenue, is at another excluded, as being extraordinary' or 'reproductive.' The entire net income of all railways, whether the property of the The resultState or of guaranteed companies, has now been entered as ing obImperial revenue, and the interest to shareholders as Imperial expenditure. The Indian accounts represent, therefore, not only the Indian taxation and the cost of administration; they

scurities.

Gross taxation

of British

India.

Net and

ation of

British
India.

represent the trade expenses and profits of the Government as a great railway owner, canal maker, opium manufacturer, salt monopolist, and pioneer of new industries. They also represent these profits and expenses under diverse systems of account at different periods.

I shall therefore first endeavour to exhibit the actual taxation of British India, as compared with that of the Mughal Empire. I shall then show the gross revenue and expenditure of British India, whether of the nature of taxation or otherwise, and analyze its principal items.

THE TAXATION paid by the people of British India during the ten years ending 1879, averaged 35 millions. The subjoined table shows the gross items, exclusive of the opium duty which is paid by the Chinese consumer, tributes from foreign or feudatory States, forest receipts, and the Mint. The actual taxation arranges itself under seven branches, as given in the statement on the opposite page.

The net taxation of British India, that is to say, the sums gross tax realized, less the cost of collection, averaged 32 millions.1 Returns of net taxation, however, depend much upon the method on which they are prepared. But the final accounts as presented to Parliament enable us to arrive accurately at the gross taxation paid by the Indian people, as above shown, at 35 millions during the ten years ending 1879, or a rate of 3s. 8d. per head.

English and Indian

taxation.

Indian taxation

under the

Mughals,

This rate contrasts alike with that paid by the taxpayer in England, and by the subjects of the Mughal Empire in India. The 34 millions of people in Great Britain and Ireland pay 68 millions of Imperial taxation,2 besides heavy local and municipal burdens. The revenues of the Mughal Empire, derived from a much smaller area and population than those of British India, varied, as we have seen,3 from 42 millions net under Akbar in 1593 to 80 millions under Aurangzeb in 1695. If we examine the items in the Mughal accounts, we find the explanation of their enormous totals. The land tax then, as now, formed about one-half of the whole revenue. The net land revenue demand of the Mughal Empire averaged [Sentence continued on page 354

1 Compiled from the Parliamentary Return, 8th July 1880, pp. 4, 5.

2 Customs, 20 millions; Inland revenue, 48 millions: total taxation, 68 millions. The gross revenue of the United Kingdom in 1880 was£81,265,055, besides £29,247,595 of local taxation; total, £110,512,650.

3 Ante, p. 240; table of Mughal Revenues (1593 to 1761), p. 242.

1870-71. 1871-72. 1872-73. 1873-74. 1874-75. 1875-76.

1876-77.

1869-70.

1877-78.

1878-79.

£35,149,106 36,296,698 34,733,605 35,680,628 34,823,778 35,309,505 35,798,656 34,007, 138 34,727,217 40,867,911

40,867,91