Sir J. D. REESasked the Secretary of State for India whether the Madras Presidency has contributed in two years £3,480,000 to the Central Government, and has now a Budget deficit of £1,440,000 to face, which is due to no act or extravagance on its own part; and whether the scale of the Madras contribution will now be reconsidered?
§ Mr. MONTAGUIn accordance with the Devolution Rules framed under the Government of India Act, the Government of Madras have contributed to the Government of India during the financial year 1921–22 a sum of 348 lakhs of rupees (equivalent to about £2,200,000 at the current rate of exchange). The Government of India have budgeted for a like contribution during the financial year 1922–23. I understand that the Madras Government have made representations to the Government of India on the subject of their contribution. It is the declared policy of the Government to reduce these provincial contributions as circumstances allow, but the Finance Member in his Budget statement for the coming year has explained that the financial position of 587W the Central Government, necessitating, as it has, heavy new taxation, renders a general reduction of provincial contributions impossible at the moment. I have not yet received the Madras Government's Budget estimates for 1922–23. The provinces have actually had large additions to their revenues placed at their disposal under the Reform Scheme, though this addition has, unfortunately, been set off by the great universal rise in prices which has occurred everywhere in the last few years.