THE INDIAN REVENUE. (Hansard, 27 March 1862)

THE EARL OF AIRLIE

rose to ask whether a report which had appeared in the public journals of Friday last was true, that the, India Licence Act had been abolished, and that 50 lacs of rupees, or £ 500,0,00, which had already been collected, had been returned to the taxpayers? If it were so, it would be very, gratifying to their Lordships and to the country to know, that the finances of India were in such a flourishing condition; but he would beg to remind their Lordships that there had been a. general expectation that the customs duties on the import of manufactured articles would have been abolished, or at any rate reduced, as soon as the state of the revenue would allow. He did not wish to discuss the policy of levying those duties in India; but he would observe that those duties had been petitioned against by every considerable town in the north of England, and in Scotland that was engaged in the cotton trade; and they had never been defended on principle by the Government. Last year the Under Secretary of State admitted that they were perfectly indefensible; and that the only excuse that could be made for them was the necessity of raising a large revenue. The severe financial pressure which existed last year appeared to have abated, and the first use that had been made of the fact by the Indian Government appeared to be the abolition of another tax which had already yielded more than £ 500,000. He wished to say one word as to this tax which had been remitted. The tax, at the time it was proposed, was the subject of considerable discussion in the other House of Parliament. It was defended in 1860 by Sir Charles Wood, who was then, as now, Secretary for India. He maintained that the tax was a just tax, that it was admitted to be just by those who paid it, and he went so far as to say that it was a popular tax. Now he did not wish to attack the policy of the Indian Government. Circumstances might have since arisen which rendered the continuance of the tax unadvisable, and which might not have been for seen in 1860. He was quite willing to admit also, that as India bore the expense of its own administration, 129 those who administered the affairs of India were bound to consult the interests of that country. But when we heard that for the first time the Indian Government had a surplus, and that the first use they made of that surplus was to remit a tax which, by the Minister of the Crown who was more directly responsible for the affairs of India, had been declared to be a tax just, popular, and easily collected, leaving unrepealed customs duties which were of a protective character, he did not think he was guilty of any unreasonable curiosity in asking the Government—first, whether it was true that the Licence Tax had been remitted; and next, if it were true, if the Government could explain the reasons which induced the Indian Government to remit it?

THE DUKE OF ARGYLL

said, that no official information had reached the India Office in regard to the course which the Indian Government had finally resolved upon in reference to the Licence Tax, and even the last private letters from the Governor General were not of a nature to enable his right hon. Friend the Secretary of State for India to state what course the Government in India intended to pursue with regard to that tax. He thought it possible, however, that the noble Earl's information might be correct, and that the Indian Government would rather abstain from collecting the tax than abolish it. He thought his noble Friend was not, quite aware of the circumstances under which the tax now stood. As far as he (the Duke of Argyll) could make out, the Licence Tax was a matter of very grave consideration in India a year and a half ago. In point of fact, it had never been actually collected throughout the whole of India, but he believed that the collection had begun in certain parts of the Presidency of Bombay and elsewhere; but as a general measure the tax had never been put in operation, and in all probability it would turn out that the recent course of the Government was not so much an abolition of the tax had never been put in operation, and in all probability it would turn out that the recent course of the Government was not so much an abolition of the tax as deferring the collection for the present. He was far from dissenting from the observation of his noble Friend as to the abstract inexpediency of remitting this tax, and leaving unrepealed import duties which, though not intended to be so, were undoubtedly protective in their operation; and he believed it was the intention of the Indian Government, as soon as possible, to modify those import 130 duties; but on a question of repealing one tax and putting in force another the Indian Government must consider the comparative burden on the people of India. The general tenor of the communications from India was that the financial condition of that country was so hopeful that ere long the Government would probably find itself in a position not only to continue to refrain from collecting this Licence Tax but to modify the customs duties also.