HC Deb 21 July 1862 vol 168 cc622-5

rose, pursuant to notice, to call the attention of the House to a question of considerable importance connected with the finance of India—namely, the large balances held in India and in England on account of the Government of India, and to the manner in which the Finance Accounts for India laid before the House are made up; and to ask the Secretary of State for India, whether any part of the balances will be applied towards the repayment of the Loans by means of which the balances have been increased; and, whether the Finance Accounts will be made up in a clearer manner? The hon. and learned Member said, that be far back as 1853 the statesmen who administered the financial affairs of India had departed from the good and homely system of finance by which the expenditure of the year was met by its income. The Government of India then embarked on a much more comprehensive idea of its duties, increasing its expenditure beyond its income. This went on till 1857, when the expenditure was once more brought down to the level of the income. In that year, however, in consequence of the mutiny, the expenditure increased beyond the income no less than £13,000,000. Efforts had, indeed, been made to bring down that excess; but even in the present year there was an excess of expenditure of no less than £500,000, and the total excess from 1854 to 1862 amounted to no less than £41,500,000. This excess was, in the first instance, when moderate, easily met by appealing to credit in India; it was sustained by a system of open loans, and there was no real check; but when the demands of the mutiny were to be met, England had to come to the rescue, and the results were manifest in a paper which had been laid on the table of the House. The result was that the registered debt in India had increased from £46,000,000 in 1857, to no less than £62,000,000, and the increase of the debt in England represented an addition of £36,000,000, against a debt in 1857 of £4,000,000. But, while indebtedness went on increasing at such an enormous rate, there had been an apparent prosperity in India by the increase of the cash balances, to the credit of the Government in India and in England. Before the mutiny the balances amounted to £16,000,000, but these were enhanced by the sum of £3,000,000 belonging to the railway companies—so that the actual balances were not more than £13,000,000. But, with the facility of credit which the Indian Government enjoyed in this country, the balances in England and India amounted to £23,300,000, while the sum belonging to the railways was only £2,500,000. The Great Mogul never had such balances. These enormous balances were represented by some as a sign of the great prosperity of our Indian administration; but, in reality, they only represented an excess of debt contracted under an apprehension that there would be a very large expenditure and a deficiency of revenue, which happily had not occurred, the people of India having to pay 5 or 6 per cent on the excess. It appeared, according to Mr. Laing, that only a balance of £10,000,000 was requisite in India, while the actual balance was £17,000,000. He was anxious that the Secretary of State should make some distinct declaration, either by means of a statement in that House, or by means of a despatch to be addressed to India, which would place before the Government of India the true character of these balances, and secure their appropriation in reduction of that debt which they really represented. He had also to state to the House that, owing to the mode in which the accounts were prepared, it was difficult to ascertain the exact condition of Indian finances. The Secretary of State had stated that the day of keeping open a loan for registered debt was past; but it was desirable that the day of all open loans should be past. There was an extrordinary item in the account of the debt given in the Return on the table called "Deposits and Miscellaneous," the total amount of which was no less than £10,220,000. That item had increased in the last few years from £8,000,000. But there were other sources by which the debt had been increased, such as deposits for the service funds, Treasury notes, and the like. With respect to all these matters, it was desirable that an account more easy to understand should be furnished, and the entire system of accounts remodelled, so that there might be no ground hereafter for supposing that there was an increase of prosperity in India, merely because the balances in favour of the Government had increased. Indian accounts had always been complicated in their form; but it was cer- tainly a startling evidence of their obscurity that a man of Mr. Laing's experience should have been unable to comprehend them, and should have fallen into such a grave error as to believe that the repayment of a debt due to the Government was an item of revenue which ought to be placed against the expenditure for the year. Whatever might be the excellence of these accounts in the eyes of a clever accountant, they ought to be laid on the table in as clear and simple a shape as would enable any ordinary person to understand them. Apart from the voluminous and detailed account, the House ought to be furnished with such a succinct summary as would give them a knowledge of the exact state of affairs. They ought to have clear, combined accounts of the expenditure both in India and in England, together with better accounts of the balances in the Home and the Indian Treasuries. Such information would prevent the erroneous impressions on these matters which were now created. He hoped, also, that the Secretary of State would get rid of the pretensions of such an officer as the so-called Indian Chancellor of the Exchequer. If individual members of the Indian Government took distinctive positions before the public, and presumed to deal with the finances of India, this result followed—that they were unable to restrain themselves under the influence of the flattery they received in India, and they gave themselves out as the protectors of the people of that country, even against what they termed the oppressive taxation of the Queen's Government in England. Such a mode of holding up the Home Government to opprobrium was most dangerous, and calculated to injure the stability of our rule in India. He therefore trusted that the Secretary of State and his Council would keep Indian finance under their strong control, and also discourage these appeals to the Indian public.


said, he did not think it necessary on that occasion to enter into the general question of Indian finance. His hon. Friend had called attention to the present form of the Indian accounts, and in reply to his observations he had to say that those accounts were kept now in the form which was settled some years ago by a Committee of that House. Like all such documents they required a good deal of study before one could tell exactly where to find what he wanted. His hon. Friend had referred to the debt incurred by temporary loans and the issue of Treasury notes, and said it was difficult to tell how the debt stood; but if he would turn to the printed accounts at page 86 he would find the figures given both of the debt incurred and the debt discharged in respect of the temporary loans and bills issued. As to the military charges at page 48, they would find the amount of the Indian and home military charges specified. It was impossible to prevent hon. Members from being misled if they did not turn to the right column or the right page of the accounts. All he could say was, that there were one or two points upon which he was anxious to amend the form of the accounts; but the form of the account had been recommended by a Committee of the House, and he was unwilling to make any alteration unless sufficient reason could be shown for it.

Main Question put, and agreed to.