HC Deb 20 May 1897 vol 49 cc924-5
MR. DILLON

I beg to ask the Secretary of State for India will he explain under what circumstances a portion of the interest charges in connection with the Indian Midland and Bengal-Nagpur Railways have now for some years been met out of the Famine Insurance Fund, in view of the fact that shortly after the creation of the Famine Insurance Fund the Government of India requested the sanction of the Secretary of State to meet certain interest charges in connection with protective railways from the fund; that Lord Cranbrook, the then Secretary of State, withheld his sanction on the ground that such a step would be a complete inversion of the object with which the fund was constituted; and that this decision was upheld by two Parliamentary Committees sitting in 1879 and 1884 respectively?

THE SECRETARY OF STATE FOR INDIA (Lord GEORGE HAMILTON,) Middlesex, Ealing

The general policy of the Government is that to which the hon. Member refers as having been supported by the Committees of 1879 and 1884—namely, that money shall be borrowed for such railways only as are likely to be so productive that the net receipts will cover the charge interest on the debt incurred, and that protective railways charged on the Famine Insurance Grant shall be constructed out of the revenue. In 1885, however, the Government of India found it necessary to undertake an exceptionally large scheme of railways, two of which were intended for the protection of the country against famine. The Secretary of State in Council held that the circumstances were of a special character, which could not have been contemplated by the Parliamentary Committees; and, as the Government could not themselves construct the whole of the works, and he was unwilling to delay the two urgently needed protective lines, he authorised their construction by companies, the interest being debited against the Famine Insurance Grant. When the lines came into operation, the receipts were set against the interest, and the net charge was so debited. I should add that the Indian Midland and Bengal-Nagpur Railways traverse some of the worst famine districts, and without their distributing power it would have been impossible to have kept the people alive in those districts during the past months.