INDIA'S CONTRIBUTION TOWARDS WAR COSTS. (Hansard, 4 July 1932)

THE UNDER-SECRETARY OF STATE FOR INDIA (THE MARQUESS OF LOTHIAN)

My Lords, the Resolution which figures on the Order Paper, and which was described by the Secretary of State for India in another place as a very formidable Resolution, need not, I think, detain your Lordships very long. In essence it is a mere matter of bookkeeping. Under the present constitutional position it is not possible for the Legislature in India to vote money for military purposes outside India without the covering authority of Parliament. In the early stages of the War the arrangement was made between the India Office and the Government of India that India should defray the ordinary cost of the Indian Forces when they moved outside India and that this country should defray any additional expenditure which might be incurred on their account. In 1917 the Indian Legislature made to this country the extremely generous gift of £100,000,000 as a contribution towards the cost of the War and in the following year, 1918, the Legislature made a further vote of £45,000,000, a vote to which it attached certain conditions. One condition was that account was to be taken of the economic position of India; another was that account must be taken of any warlike expenditure that might be incurred in connection with Afghanistan. The War ended a good deal earlier than people either in this country or in India expected and the actual sum expended was only £13,600,000, the figure mentioned in the third clause of the Resolution.

In the ordinary course this House would have been asked to authorise that expenditure some time ago, but an acute controversy arose between the War Office on the one side and the Government of India on the other, because the War Office regarded India as liable for a number of other charges—counter claims on other accounts—and was anxious to treat these sums as an advance payment on account of those charges and not as part of the free gift which India had passed in favour of this country. That controversy has been pursued ever since, and it has now been fortunately settled. I believe that if there is an ex-Viceroy in this House he will agree with me in congratulating India, and the Government of 534 this country, upon having at last wiped the slate free from this controversy. It has been settled by the time-honoured method of wiping the slate, claims and counter-claims wiping one another off. Another obstacle has been the well-known controversy about the capitation grant, and that has been referred to an Advisory tribunal, presided over by Sir Robert Garran, who was Solicitor-General in Australia. That Committee is to assemble in this country towards the end of this year. Therefore a controversy which prevented the formal passage by this House of the Resolution authorising the payment of this £13,600,000 has been settled and the Resolution can now be brought before your Lordships' House. This payment does not cover certain additional sums for which India has accepted liability as part of the settlement. Against these there must be set certain receipts accruing to India and arising out of the War. I beg therefore to move the Resolution which stands in my name, which will give the final authority for this payment to be made and end a controversy which has been going on for a very long time.

Moved, Whereas by Resolutions passed on the 16th September and 26th November, 1914, respectively, this House consented to the charge upon Indian revenues, subject to certain conditions, of the ordinary pay and other ordinary charges of British and Indian troops despatched out of India for service in the Great War, as well as the ordinary charges of any vessels belonging to the Government, of India that might be employed in those expeditions:

And whereas, by a Resolution passed on the 14th March, 1917, this House consented to a contribution of £100,000,000 charged upon the revenues of India towards the expenses of the war:

And whereas the Government of India, desirous of affording further assistance to His Majesty's Government, provisionally and subject to the consent of this House met out of the revenues of India in 1918–19, with the concurrence of their Legislative Council, further extraordinary charges in respect of the Indian troops employed in the war to the extent of £13,600,000:

And whereas the Government of India are desirous of bearing finally such further extraordinary charges.

535 That this House consents that the extraordinary charges of £13,600,000 aforesaid shall be borne by Indian revenues.—(The Marquess of Lothian.)

§ LORD IRWIN

My Lords, I would like to add, in half a dozen sentences, my word of congratulation to the noble Marquess upon finding himself in a position to bring this Motion before the House. It is, as he has pointed out, technically in the nature of book-keeping, and the discharge of a technical obligation imposed by Statutes relevant to Indian revenue. I am sure that any one who, like myself, has had from time to time the melancholy duty of treading the jungle of controversy which has grown up around these financial questions in India, must be outspoken in gratitude to the noble Marquess, from the point of view both of this country and of India, that he has contrived to render that jungle no longer existant. I do not think anybody could have followed that controversy in any degree without being amazed at the ability and ingenuity of Government Departments, both in India and in this country, in the way in which they have produced new matters of controversy whenever the old seemed to be approaching settlement, and have maintained this question in being, the despair of everybody concerned with it, for the last fourteen or fifteen years.

Therefore no praise is too high for those who have finally brought it to a conclusion. The noble Marquess said quite truly that one of the matters which had delayed the settlement was the fact that it had become connected with the vexed question of the capitation rate. That is not indeed directly referred to in the Resolution, but it is very good news to hear that that old controversy is to be referred to arbitration in the course of the coming autumn. I understand that the arbitration is on an advisory basis only, but I venture to hope that it is reasonable to expect that the award which is likely to be forthcoming will be of such a character that its own merits are likely to win for it acceptance both in India and in this country. Any one who has examined this matter will agree that it is quite unworthy of the arrangement which ought to exist between this country 536 and India. It has taken fifteen years to settle these somewhat petty problems of finance, and I hope we are not to take it as an omen or measure of the time likely to be taken to settle the graver problems that are shortly to come before His Majesty's Government.