have seen fit to require from the local Government, to the Secretary of State in Council.

(2) If the application relates to

(a) the grant in an individual case of any increase of pay; or

(b) the creation of a temporary post,

the Governor General in Council may, at his discretion, on behalf of the Secretary of State in Council, sanction the proposal, or may, and if he dissents from the proposal, shall, forward the application with his recommendations, and with such further explanations of the proposal as he may have seen fit to require from the local Government, for the orders of the Secretary of State in Council.

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SCHEDULE IV.

(SEE RULE 29.)

1. The local Governments mentioned below shall, save as hereinafter provided, make in every year provision in their budgets for expenditure upon relief of, and insurance against, famine of such amounts respectively (hereinafter referred to as the annual assignments) as are stated against each :

2. The provision shall be made in the shape of a demand for a grant, and the estimates shall show, under the major

heads concerned, the method in which it is proposed to utilise

the grant.

3.

The grant shall not be expended save upon the relief of famine or upon the construction of protective irrigation works or other works for the prevention of famine. Any portion of the grant which is not so spent shall be transferred to the famine insurance fund of the province.

4. The famine insurance fund shall consist of the unexpended balances of the annual assignments for each year, transferred to the fund under paragraph 3 of this Schedule, together with any interest which may accrue on these balances.

5. The local Government may, in any year when the accumulated total of the famine insurance fund of the province is not less than six times the amount of the annual assignment, suspend temporarily the provision of the annual assignment.

6. The famine insurance fund shall form part of the general balances of the Governor General in Council, who shall pay at the end of each year interest on the average of the balances held in the fund on the last day of each quarter. The interest shall be calculated at the avergae rate at which the Governor-General in Council has during the year borrowed money by the issue of treasury bills. Such interest shall be credited to the fund.

7. The local Government may at any time expend the balance at its credit in the famine insurance fund for any of the purposes specified in paragraph 3 of this Schedule.

8. Such balances may further be utilised in the grant of loans to cultivators, either under the Agriculturists' Loans Act, 1884, or for relief purposes. When such loans have been granted, payment of interest on loans and repayments of principal shall be credited to the fund as they occur, and irrecoverable loans written off shall form a final charge against the fund.

9. In case of doubt whether the purpose for which it is proposed to spend any portion of the annual assignment or the famine insurance fund is one of the purposes specified in

paragraph 3 of this Schedule, the decision of the Governor shall be final.

10. The annual accounts of the annual assignments and of the fund shall be maintained in forms to be prescribed in this behalf by the Auditor-General.

"The Committee have omitted the forms appended to this rule as originally drafted and have made a consequential change in the wording of the rule. It appears to them unnecessary and undesirable to stereotype in statutory rules forms of which the details may well require periodical modification in the light of experience.”—Jt. S. C. R. 2

Under r. 1 (2), all the provisions of the rules except those contained in rules 14, 15, 16, 24, 27, 28, 29, 47, and 48 and Schedule III are declared in force :(1) in the Presidency of Madras and the Central Provinces, on the 17th December, 1920,

(2) in the Province of Bihar and Orissa, on the 29th December, 1920,

(3) in the Presidencies of Bombay and Bengal, the United Provinces and the provinces of the Punjab, Burma and Assam, on the 3rd January, 1921.

(See notification No. 314-S in the Gazette of India Extraordinary, December, 17, 1920.)

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56a

APPENDIX B.

THE LOCAL GOVERNMENT (Borrowing)

RULES.

[See the Gazette of India Extraordinary,

December 16, 1920.]

Rule.

1. Short Title and Commencement.

2. Purposes for which loans may be raised.

3. Sanction to Loans.

4. Priority.

No. 309-S.-In excercise of the powers conferred by section 30 (1A) and 129-A of the Government of India Act, the Governor-General in Council, with the sanction of the Secretary of State in Council, is pleased to make the following rules, the same having been approved by both Houses of Parliament :

1. (1) These rules may be called the Local GovernShort Title and Com- ment (Borrowing) Rules.

mencement.

(2) They shall come into force on a date to be appointed by the Governor-General in Council, with the approval of the Secretary of State in Council, and different dates may be appointed for different parts of India.

See S. 2 Act 1919 or S. 30 (1 A) Act.

2. A local Government may raise loans on the security of the revenues allocated

Purposes for which loans may be raised.

poses, namely :

to it for any of the following pur

(a) to meet capital expenditure on the construction or acquisition (including the acquisition of land, maintenance during construction and equipment) of any work or permanent asset of a material character in connection with a project of lasting public utility, provided that

(i) the proposed expenditure is so large that it cannot reasonably be met from current revenues; and

(ii) if the project appears to the GovernorGeneral in Council unlikely to yield a return of not less than such percentage as he may from time to time by order prescribe, arrangements are made for the amortisation of the debt;

(b) to meet any classes of expenditure on irrigation which have under rules in force before

the passing of the Act been met from loan funds;

(e) for the giving of relief and the establishment and maintenance of relief works in times of famine or scarcity;