REVENUE AND EXPENDITURE
~Financial Relations with Government of India.~--Local governments
exercise their financial powers in strict subordination to the
Government of India, which alone can borrow, and which requires the
submission for its sanction of the annual provincial budgets. To ensure
a reasonable amount of decentralization the Supreme Government has made
financial contracts with the provinces under which they receive definite
shares of the receipts, and are responsible for definite shares of the
expenditure, under particular heads. The existing contract dates only
from 1911-12 (see Table V).
~Income and Expenditure.~--Excluding income from railways, post offices,
telegraphs, salt, and sales of excise opium, which are wholly imperial,
the revenue of the Panjáb in 1911-12 was £5,057,000 (Rs. 758,56,000), of
which the provincial share was £2,662,200 (Rs. 399,33,000), to which
have to be added £251,800 (Rs. 37,77,000) on account of assignments made
by the Government of India to the province. This brought up the total to
£2,914,000 (Rs. 437,10,000). The expenditure was £2,691,933 (Rs.
403,79,000). This does not include £983,000 spent from loan funds on
irrigation works, chiefly the great Triple Project. The large
expenditure on railways is imperial. Of the gross income more than
three-fourths is derived from the land (Land Revenue, 46 p.c.,
Irrigation, chiefly canal water rates, 29 p.c., and Forests, 1-3/4
p.c.). The balance consists of Excise 8-1/2 p.c., Stamps, 7 p.c., Income
Tax over 2 p.c., and other heads 5-3/4 p.c.
~Land Revenue.~--Certain items are included under the Land Revenue head
which are no part of the assessment of the land. The real land revenue
of the Panjáb is about £2,000,000 and falls roughly at the rate of
eighteen pence per cultivated acre (Table II). It is not a land tax, but
an extremely moderate quit rent. In India the ruler has always taken a
share of the produce of the land from the persons in whom he recognised
a permanent right to occupy it or arrange for its tillage. The title of
the Rája to his share and the right of the occupier to hold the land he
tilled and pass it on to his children both formed part of the customary
law of the country. Under Indian rule the Rája's share was often
collected in kind, and the proportion of the crop taken left the tiller
of the soil little or nothing beyond what was needed for the bare
support of himself and his family. What the British Government did was
to commute the share in kind into a cash demand and gradually to limit
its amount to a reasonable figure. The need of moderation was not
learned without painful experience, but the Panjáb was fortunate in this
that, except as regards the Delhi territory, the lesson had been learned
and a reasonable system evolved in the United Provinces before the
officers it sent to the Panjáb began the regular assessments of the
districts of the new province. A land revenue settlement is usually made
for a term of 20 or 30 years. Since 1860 the limit of the government
demand has been fixed at one-half of the rental, but this figure is very
rarely approached in practice. Between a quarter and a third would be
nearer the mark. A large part of the land is tilled by the owners, and
the rent of the whole has to be calculated from the data for the part,
often not more than a third or two-fifths of the whole, cultivated by
tenants at will. The calculation is complicated by the fact that kind
rents consisting of a share of the crop are in most places commoner than
cash rents and are increasing in favour. The determination of the cash
value of the rent where the crop is shared is a very difficult task.
There is a large margin for error, but there can be no doubt that the
net result has almost always been undervaluation. It is probable that
the share of the produce of the fields which the land revenue absorbs
rarely exceeds one-seventh and is more often one-tenth or less. A clear
proof of the general moderation of Panjáb assessments is furnished by
the fact that in the three years ending 1910-11 the recorded prices in
sales amounted to more than Rs. 125 per rupee of land revenue of the
land sold, which may be taken as implying a belief on the part of
purchasers that the landlord's rent is not double, but five or six times
the land revenue assessment, for a man would hardly pay Rs. 125 unless
he expected to get at least six or seven rupees annual profit.
~Fluctuating Assessments.~--The old native plan of taking a share of the
crop, though it offered great opportunity for dishonesty on both sides,
had at least the merit of roughly adjusting the demand to the character
of the seasons. It was slowly realized that there were parts of the
province where the harvests were so precarious that even a very moderate
fixed cash assessment was unsuitable. Various systems of fluctuating
cash assessment have therefore been introduced, and one-fourth of the
total demand is now of this character, the proportion having been
greatly increased by the adoption of the fluctuating principle in the
new canal colonies.
~Suspensions and Remissions.~--Where fixity is retained the strain in bad
seasons is lessened by a free use of suspensions, and, if the amounts of
which the collection has been deferred accumulate owing to a succession
of bad seasons, resort is had to remission.
~Irrigation Income and Expenditure.~--In a normal year in the Panjáb over
one-fourth of the total crops is matured by the help of Government
Canals, and this proportion will soon be largely increased. In 1911-12
the income from canals amounted to £1,474,000, and the working expenses
to £984,000, leaving a surplus of £490,000. Nearly the whole of the
income is derived from water rates, which represent the price paid by
the cultivator for irrigation provided by State expenditure. The rates
vary for different crops and on different canals. The average incidence
may be roughly put at Rs. 4 or a little over five shillings per acre. In
calculating the profit on canals allowance is made for land revenue
dependent on irrigation, amounting to nearly £400,000.
[Illustration: Fig. 83. Skeleton District Map of Panjáb.]