§ That the draft rules under Section 1 of the said Act which were presented to Parliament on the 11th August, 1920, in Command Paper Number 891 of 1920, be approved, subject, however; to the following modifications, namely:
§ Page 3, rule 1 (2), at end insert "and for different provisions of these rules."
§ Page 7, rule 15 (1), line 5, leave out from "jurisdiction" to the end of the subrule, and insert "The share so 765 allocated shall be three pies on each rupee brought under assessment under the said Act in respect of which the income tax assessed has been collected."
§ Page 7, rule 15 (2), line 6, leave out from "equivalent" to the end of the subrule, and insert "Of the amount which would have accrued to the local government in the year 1920–1921 (after deducting the provincial share of the cost of special income tax establishments in that year) had the pie-rate fixed under subrule (1) been applied in that year, due allowance being made for any abnormal delays in the collection of the tax."
§ Page 9, rule 20, after "contributions" insert "and assignments."
§ Page, 11, rule 27 (2), at end insert "(3) The Local Government of a Governor's province shall have power to sanction any expenditure on transferred subjects which relates to the heads enumerated in Section 72D (3) of the Act, subject to the approval of the Secretary of State in Council or of the Governor-General in Council, if such approval is required by any rule for the time being in force."
§ Page 16, rule 41, leave out from the beginning of the rule down to "without" and insert "No allowance and no special or personal pay shall be sanctioned for any post or class of post or for any Government servant."
§ Page 21, Schedule I., Part I., entry 44, at end insert "45. The Public Service Commission," and renumber entries 45 and 46 as 46 and 47.
§ Page 27, Schedule I., Part II., entry 47, leave out "other public services within the province" and insert "public services within the province, other than all-India services."
§ That the draft rules under subsection (2) of Section 2 of the said Act, which were presented to Parliament on the 11th August, 1920, in Command Paper Number 891 of 1920, be approved.
§ That the draft rules under subsection (3) (a) of Section 10 of the said Act which were presented to Parliament on the 11th August, 1920, in Command Paper Number 891 of 1920, be approved.
§ That the draft rules under subsection (3) (h) of Section 10 of the said Act which were presented to Parliament on the 11th August, 1920, in Command Paper Number 891 of 1920, be approved.
§ That the draft rules under subsection (1) of Section 12 of the said Act which were presented to Parliament on the 11th August, 1920, in Command Paper Number 891 of 1920, be approved.
§ The noble Earl said: My Lords, the Resolutions which appear in my name on the Paper have, I am afraid, a very formidable appearance, and the subject with which they deal must seem both technical and complicated to those of your Lordships who are not acquainted with the machinery of the Government of India Act. But in moving them I do not propose to enter into any technical details, and I do not think it will be necessary for me to occupy much of the time of the House in dealing with their.
§ Taken as a whole the effect of the Resolutions on the Paper is to ask the assent of your Lordships' House to the Rules in the White Paper Cmd. 891 which was laid before this House in August last. The Rules in that Paper are made under six sections of the Government of India Act, and the only reason why they are made the subject of six separate Resolutions on this occasion instead of one comprehensive Resolution is to restrict the area of any possible discussion in the event of an Amendment of any one of the Rules being made in either House of Parliament. Having said that, I would ask the leave of 767 the House to deal with them as a whole, and to turn to the White Paper which contains the Rules to which they refer. It is enacted by Section 1 of the Government of India Act that provision may be made by Rules for the classification of the functions of Government in the first place into provincial and central subjects, and then for a further classification of the provincial subjects into those which are reserved to the Governor in Council and those which are transferred to the Governor and Ministers. That general principle being laid down in the Act, details were left to be carried out by Rules.
§ The first step the Government took immediately after the passing of the Act was to appoint a Committee to go out to India to investigate these details on the spot. That Committee was presided over by my noble friend Lord Southborough, and I should like to take this opportunity of expressing to him and his colleagues the thanks of the Government for the work which they did. The Government of India then took into consideration the recommendations of the Southborough Committee and drafted Rules based upon those recommendations. Those Rules were then submitted to the Joint Committee presided over by the noble Earl, Lord Selborne—to whom also we are greatly indebted—who are, so to speak, part authors with the Government of the Rules for which I am now asking the assent of your Lordships.
§ Part I of the Rules in this White Paper and Schedules I and 2 on pages 18 and 28 contain all the Rules relating to the classification of subjects. I do not propose to say anything about them unless any one of them is challenged or I am asked any question. They speak for themselves, and represent the considered opinion of the authorities that have drawn them up. I should like in this connection to say one word about the third series on page 34, which is the subject of the third Resolution on the Paper. These Rules provide the machinery whereby the Government is to be carried on temporarily when, for any reason, there is either no Minister at all or no Minister in charge of a particular portfolio. Vacancies in a Ministry might occur either by death or resignation, and those vacancies would be filled up in the course of a few days. But cases may also arise in which owing to disagreement with the Legislatures it is impossible to fill a vacancy, and it may be that the dis- 768 solution of a particular Legislative Chamber may be necessary before the vacancy can be filled. In those cases the Government has to be carried on, and it is therefore provided in these Rules that the Governor shall certify to the Governor-General in Council that an emergency has arisen, and he shall then administer the subject himself.
§ The financial provisions for these functions of Government are contained in Part II of the first series of Rules. As in the case of the classification of the functions of government, so with finance, the first problem was to provide out of the revenues of India the funds for Provincial Governments and at the same time leave sufficient revenues for the Central Government. That problem was investigated by my noble friend Lord Meston, and I think he will bear me out when I say that his Committee found it practically impossible to leave the Central Government of India without a deficit unless some contributions were made to it by the Provincial Governments. The recommendations of my noble friend's Committee were subjected to considerable criticism by the Provincial Governments, and the form in which the Rules appear in the White Paper is that in which they were finally approved by the Select Committee.
§ The next problem was to divide the revenues between the two halves of the Provincial Governments so as to allow of funds for reserved and transferred subjects. Hitherto the control over all expenditure from the revenues of India was vested in the Secretary of State in Council. The Legislative Council had no control over expenditure, though they had the power of criticism. It is obvious that such a system was impossible under the new form of government. In the case of transferred subjects the Minister will in future be responsible to the Provincial Legislature which will control the appropriation, vote the Budget, and have power to reduce or withhold supplies. The control, therefore, which has been exercised hitherto by the Government of India and the Secretary of State will be exercised in future by the Provincial Legislatures. It will be necessary, however, in respect of all India Services to restrict in two matters the control of the Provincial Legislatures. Rule 27 and Schedule 3 define these two limitations. Rule 27 (2) states the new procedure whereby, except in those two respects, Provincial Governments may sanction expenditure approved by the 769 Legislative Council. Except in these two matters the Legislative Council in each province will control its own finance.
§ The only other matter to which I desire to refer in the first series of Rules is Part III, which deals with the establishment of a Finance Department. There has always been in each. Provincial Government a separate Financial Secretary, and in Council Governments a Member in charge of finance, but the Finance Department never had any separate statutory existence, such as is exercised by the Treasury in this country. It has been regulated by Rules of Business, and it is now proposed without any change except in minor details to make these Rules of Business statutory.
§ The second series of Rules in the White Paper deal with the borrowing powers of the Provincial Governments. As a natural consequence of the allocation of separate sources of revenue to the Provincial Governments those Governments must have the power of borrowing on the security of their revenues. Section 2 of the Government of India Act enables Local Governments to raise loans, and Series 2 of the Rules defines the conditions which are to govern the borrowing. They will be subject to the sanction of the Government of India in respect of loans raised in India, and of the Secretary of State in the case of sterling loans raised in London. Those are the Rules contained in the first and second series of the White. Paper, and they are the subject of the first, second, and third Resolutions on the Paper.
§ I ought to say one word upon the Amendments with which I am moving the adoption of the fist series. They are practically all merely drafting Amendments. I need only mention the first Amendment on the Paper, which refers to Rule 15—a Rule which was inserted by the Joint Committee to give the provinces some share in the growth of revenue from taxation on incomes. At the time the Joint Committee made this Rule the material to enable them to calculate what the rate should be was not available. The Government of India have now calculated this, and the effect of The Amendment is simply to carry out the Joint Committee's intention in a concrete instead of an inferential form. The second Amendment is merely an alteration to make clearer the meaning of the words "net 770 amount" in the Joint Committee's Rules. All the other Amendments are either consequential or of a purely drafting character.
§ I have now explained the object of the Rules contained in Parts I, II and IIL of the White Paper. Those contained irk Series 4, 5, and 6 deal with matters connected, not with the Executive, but with the Legislature. The main powers and duties of the Legislature, as laid down in Section 10 of the "Act, and the Rules dealing with franchise and procedure have already been passed. There are, however, two small matters which are the subject of these Rules, and they are, briefly, the limitations put upon Provincial Legislatures with regard to All-lndia taxes and All-India loans. Section 10 of the Government of India Act authorises Provincial Legislatures to make loans for the government of the Province, but requires the previous sanction of the Governor-General in Council in the case of laws which deal with matters affecting the interests of British India as a whole. One of these is taxation, and it is laid down that the Local Legislature may not, without previous sanction of the Governor-General, impose any new tax, unless the tax is a tax schedule as exempted from this provision by Rule. The Rules in Series 9: provide this schedule of exempted taxes. The other class of Bill which require the previous sanction of the Governor-General is that which would repeal or alter any All-lndia law, and tile Rules in Series 5 provide the list of such Acts. The last of the Series, No. 6, follows verba[...]m the recommendation of the Functions Committee's Report. Section 12 of the Act authorises the Governor to withhold consent to, and requires reconsideration of a Bill in certain cases to be provided by Rules. This series prescribes what these cases are to be.
§ Those are the Rules referred to in these Resolutions. I have only to conclude by assuring your Lordships that they have had continued and careful consideration at the hands of the Government of India, of the India Office, and of the Committees to which they have been referred. In the form in which I now beg to move them they represent the considered opinion of those bodies in an earnest attempt to find the best solution for a difficult and complicated problem. I beg to move that the first Resolution, subject to the Amendments on the Paper, be agreed to.771
§ Moved to resolve, in accordance with the provisions of subsection (3) of Section 44 of the Government of India Act, 1919, that the draft rules under Section 1 of the said Act which were presented to Parliament on the 11th August, 1920, in Command Paper Number 891 of 1920, be approved, subject, however, to the following modifications: [The modifications are set out at the commencement of Lord LYTTON'S speech].—(The Earl of Lytton.)
§ THE EARL OF SELBORNE
My Lords, I think it convenient that any discussion on these Resolutions should take place on the first; then the others can pass without farther discussion. These Resolutions are in accordance with the recommendations of the joint Select Committee of the two Houses, over which I had the honour to preside last year and this year. We recommended specifically that in the case of most of these Rules they should only come into operation when approved by positive Resolution of both Houses of Parliament, thereby reserving to Parliament the opportunity of a check on a curious form of legislation—curious but, in the circumstances, inevitable. For it is really the case that these Rules, which emanate from the Government of India or from the India Office, contain as much of the new Constitution of India as does the Government of India Act itself. I do n at think legislation on other lines would we been possible, and therefore I make no complain about it, but it was because of the enormous importance of these Rules and the fact that they really represent so many clauses of the Statute that we recommended that they should be subjected to a Resolution of positive assent in the House of Lords and in the House of Commons.
These Rules, after they had been drafted by the Government of India and criticised by the India Office, were laid before the same Joint Select Committee, which made some. alterations in them, and the form in which they are now presented to your Lordships is the form in which they left the Joint Select Committee, except where it is specifically stated that certain Amendments are proposed. My noble friend has given the reasons for those Amendments, and I think they will commend themselves to your Lordships. As regards these Rules, if the Government of India Act is to come into full operation at the earliest possible moment it is necessary that your Lordships should assent to these Re-772 solutions, and I know no reason why you should refuse that assent, and I know many reasons why you should not at this last moment withhold your assent.
As this is the last opportunity which your Lordships will have of reviewing the operation of the Government of India Act, and as these Resolutions are founded on the Reports of the Joint Select Committee over which I had the honour to preside, I do not think I shall be out of order if I. take this opportunity of saying something about the chances of the successful operation of the Government of India Act under the conditions which have arisen in India since the Joint Committee sat—since Parliament passed the Government of India Act, in special connection with a recommendation of the Joint Select Committee to which I will now draw the special attention of your Lordships.
Paragraph 14 of the Report of the Joint Select Committee, agreed to according to my recollection unanimously by that Committee, runs as follows—The Committee have been greatly struck by the earnest representations made to them by several witnesses, both of British and Indian birth, to the effect that the Government of India and the Provincial Governments must become more vocal and put forth their view of what the good of India requires with more courage and more persistence than they have in the past. It has been represented to them that it will be of the utmost importance in the future that the Government of India and the Provincial Governments should have means of explaining to the people of India the reasons why things are done, the reasons which underlie decisions, and the arguments against proposals which they consider will be detriment at to the welfare of the country. It was represented to the Committee that at present, to a great extent, the ease for the policy of the Government of India and of the Provincial Governments is unknown to the masses of Indians whereas the case against that policy is becoming every day more widely disseminated by means of the vernacular Press. They are glad to think that this opinion is also shared by the Secretary of State for India and the Viceroy. It is dealt with in paragraph 326 of their report on Indian Constitutional Reforms.This paragraph, which I venture to say is a very important one, was inserted because it was given in evidence before us by Anglo-Indians and by Indians that India was at times flooded with calumnies and lies directed against British rule in that country and against the acts and policy of the Government of India; that the people of India, being many of them very ignorant, when they heard these calumnies and lies or when they were 773 read out to them round the village fires said, "Why, this must be true, because the Government does not contradict it." And the officers of the Government sat mum, the Government of India made no sign, and infinite mischief resulted. But we were told that in the war a different state of things prevailed. Then the Government of India became vocal—it had a propaganda of its own with remarkable and instantaneous results. The same people who had believed these calumnies and lies said, "Oh, we trust the Raj. They tell us it is not true, and now we understand it is not true. Now we understand their policy, because it has been explained to us."
I hear from authority which I cannot doubt that at no moment of our connection with India has there been a greater, a more malignant, and a more persistent system of calumnies and lies than exists at the present moment, flooding India against the intentions of the Indian Government and of His Majesty's Government and the whole British policy towards India. I am told, on authority which I cannot doubt, that these calumnies and lies are being believed. Why? Because the Government of India remains dumb. I am told that the most dire consequences may possibly ensue from the campaign of calumny which is going on; yet notwithstanding our recommendations, notwithstanding the experiences of the past, I am told that nothing serious, nothing really important in the way of propaganda, is being done to counteract this campaign which, as we all know, is directed against British rule in India.
I have taken this opportunity of recording this protest, which I know would be voiced and supported by the whole of the Joint Select Committee over which I had the honour to preside. If, in the face of past experience and of what is going on at this moment in India according to my information, His Majesty's Government through the India Office and the Government of India refuse to take the necessary steps to counteract these calumnies and lies, a most tremendous responsibility will rest upon them. I cannot conceive for what reason they are neglecting to take these necessary precautions, and I believe it is not yet too late for them to do a great deal to counteract the dire mischief of this campaign. If they persist in letting this whole case—this great case of the 774 benefits of British rule, of the noble and magnanimous intentions of British rule in India—go by default, then I say their responsibility will be great indeed.
§ On Question, Fiat Resolution agreed to.
§ Remaining Resolutions agreed to.