Governments for their own free disposal, and in return
they have to make fixed annual contributions to the
Central Exchequer. These contributions are in
no case to be subject to increase in the future, but
on the contrary to be reduced gradually and to cease
at the earliest possible moment compatible with the
irreducible requirements of the Government of India.
The Act of 1919, it is true, transfers to the Indian
Legislature no direct or complete statutory control
over revenue and expenditure, and powers are still
vested in the Government of India to override the
Assembly in cases of emergency and to enact supplies
which it refuses if the Governor-General in Council
certifies them to be essential to the peace, tranquillity,
and interests of India. But the fact that there
was a deficit which could only be met by increased
taxation offered exceptional opportunities which might
easily have been used for embarrassing obstruction
by a young and immature chamber naturally concerned
for its own popularity. Even a direct conflict
between the Government and the Assembly might not
have been impossible, and the consequences would have
been lamentable. For if the Government of India
had been driven to use its statutory powers to impose
taxation and secure supplies in opposition to the
Legislature during its very first session, all the
hopes of friendly co-operation based on the new constitution
would have been wrecked far more disastrously and
permanently than by any “Non-co-operation”
movement. The Legislative Assembly was wise enough
to exercise its rights with sufficient insistence
to show that it was conscious of them, but never to
strain them. It did not refrain from criticism
of almost every department in turn or from motions
to reduce the official estimates for them. Many
of the criticisms were sound, and some of the reductions
were accepted by Government. Mr. Hailey handled
a delicate situation with unfailing patience and skill.
Even in regard to new taxation he endeavoured to meet,
as far as the exigencies of the Budget allowed, the
objections of the Assembly to such increases as, for
instance, higher postal rates, which press most heavily
on the least well-to-do classes. Nothing, however,
helped him so much to get his Budget through without
a serious conflict as the decision of the Government
to seek in an increase of the import duties over two-thirds
of the new revenue to be raised to meet the deficit.
For there Government took up common ground with Indian
opinion on fiscal matters and carried into effect the
principle laid down by the Select Joint Committee
on the Reforms Bill, and endorsed by the Secretary
of State, that the Government of India must be granted
the same liberty to devise Indian tariff arrangements
on a consideration of Indian interests as all other
self-governing parts of the Empire enjoy. If
the Assembly did not see altogether eye to eye with
Government as to the necessity for all this increased
expenditure and increased taxation, its objections
were at least mitigated by a form of increased taxation
in which it saw the first step towards fiscal autonomy.
In this as in every other question with which the
Legislature had to deal, the Government of India showed
its willingness to accept as far as possible the guidance
of Indian opinion and to act as a national Indian
Government, and not merely as the supreme executive
authority under the Government of the United Kingdom.