Local Government concerned, and shall be paid in such instalments, in such manner, and on such dates as the Governor-General in Council may prescribe. Other Mea sures. 43. After having described how a Province will be made increasingly independent of the Central Government by this device of a progressively vanishing annual contribution, our next step is to refer to other measures which tend in the same direction viz., new rules for control over expenditure, for taxation, borrowing, provincial balances, provincial Loan Account, advances to provincial Governments, and provincial famine assignments. We shall take them seriatim. 44. Rules of Expenditure. As already stated the old rules were embodied in various financial codes and they seriously curtailed the powers of the local Government in the matter of sanction of expenditure, giving of grant etc. New principle of control provincial penditure. over ex. As such restrictions were inconsistent with financial devolution, new rules were framed. The underlying principle was thus explained by the Joint Committee. In the first place a clear distinction between the powers of the Provincial Government to sanction and incur expenditure on the transferred subjects, and its powers in relation to expenditure on reserved subjects must be drawn. Regarding expenditure over the reserved subjects, the Joint Committee thought it unnecessary and undesirable to prescribe by statutory rules under the Act of 1919 the extent to which the Secretary of State in Council was prepared to delegate to Provincial Governments his powers of control. Such delegation was always in the past effected by orders of the Secretary of State in Council made in virtue of the powers conferred by the proviso to Section 21 of the Act of 1915, and the same practice was to be continued under the new regime. Of course such an order under section 21 of the Act would necessarily assume an entirely new complexi on now, as large powers of control even on expenditure on reserved subjects have been vested in the Provincial Councils by the new Act. Thus in purely provincial matters which are reserved, where the provincial Government and Legislature are in agreement regarding the desirability of incurring expenditure on them, the Secretary of State in Council might allow the Governors in Council to dispense with his previous sanction if he so desires. But whatever arrangements of this kind the Secretary of State in Council might think fit to make, the result would be a mere delegation of Secretary of State's statutory powers of control, and his responsibility to Parliament would and must remain undiminished. No rules under the new Act therefore, are required for the specification of these delegation limits. They are to be left to the executive orders of the Secretary of State in Council as before. Coming next to the control over expenditure on transferred subjects, the Joint Committee rightly drew attention to the intention of the Act of 1919, that such expenditure should be, with the narrowest possible reservations, left within the exclusive control of the provincial Legislature and subject to no higher sanction save such as is reserved to the Governor by section II (2) (b) which authorizes him in case of emergency, to incur such expenditure as may in his opinion be necessary for the safety or tranquility of the province or for the carrying on of any Department. But though the widest freedom is desirable, some reservations are required. The Secretary of State in Council must retain control over expenditure over transferred subjects which is likely to affect the pros ' pects or rights of the All-India services, which he recruits and will continue to control, and he must retain power to control the purchase of stores in the United Kingdom. But subject to these limitations Ministers should be as free as possible from external control and the control to be exercised over expenditure on transferred subjects should be exercised by the Provincial Legislature and by that Body alone." The Rules of Expenditure based upon the above principles are as follows: Devolution Rule 27-Powers of sanctioning transferred expenditure (1) The local Government of Governor's province shall not, without the previous sanction of the Secretary of State in Council or of the Governor-General in Council as the case may be, include any proposal for expenditure on a transferred subject in a demand for grant, if such sanction is required by the provisions of Schedule III to these rules. (2) Subject to the provisions of sub-rule (1), the local Government of a Governor's province shall have power to sanction expenditure on transferred subjects to the extent of any grant voted by the Legislative Council. (3) The local Government of a Governor's province shall have power to sanction any expenditure on transferred subject which relates to the heads enumerated in section 72-D (3) of the Act, subject to the approval of the Secretary of State in Council, or of the Governor-General in Council if any such approval is required by any rule for the time being in force. Devolution Rule 28-(1) The powers of a local Government under the preceding rule to sanction expenditure, may be delegated by the local Government to an authority subordinate to it, after previons consultation with the Finance Department, to such an extent as may be required for the convenient and efficient despatch of public business. (2) Any sanction accorded under these rules shall remain valid for the specified period for which it is given, subject, in the case of voted expenditure, to the voting of grants in each year. Schedule III mentioned in Rule 27 lays down: (1) The previous sanction of the Secretary of State in Council is necessary. (1) to the creation of any new or the abolition of any existing permanent post, or to the increase or reduction of the pay attached to any permanent post if the post in either case is one which would ordinarily be held by a member of an All-India service, or to the increase or reduction of the cadre of an all-India service. (2) To the creation of a permanent post on a maximum rate of pay exceeding Rs. 1200 a month, or the increase of the maximum pay of a sanctioned permanent post to an amount exceeding Rs. 1200 a month. (3) To the creation of a temporary post with pay exceeding Rs. 4000 a month, or to the extension beyond a period of two years of a temporary post with any pay exceeding Rs. 1200 a month. (4) To the grant to any officer of an allowance, pension or gratuity which is not admissible under rules made or for the time being force under section 96-B of the Act; and (5) To any expenditure on the purchase of imported stores or stationery otherwise than in accordance with such rules as may be made in this behalf by the Secretary of State in Council. (1) Every application for the sanction of the Secretary of State in Council required by paragraph,(1) shall be addressed to the Governor-General in Council, who shall, save as hereinafter provided, forward the same with his recommendations, and with such further explanatious of the proposal as he may 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 GovernorGeneral 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. Provincial 45. An enlargement of the taxing powers of the provinces is a necessary complement of the relaxation of control over expenditure. The requirement of "Previous Sanction" of the Government of India to all taxation proposals which involved legislation was the chief difficulty in the way. As the Central Government has a vital interest in the financial position of the provinces, it cannot, of course, relax its control with any degree of finality. But there are many taxes which are of a strictly local or provincial incidence, the imposition of which does not affect those resources in which the Central Government also has an interest. Previous sanction for such taxation has been done away with, both in the case of the local Government and of local bodies like the Municipalities and Boards. This has been secured by the Scheduled Taxes Rules under the Act. The previous sanction of the Governor-General is not required for the imposition by a Provincial Council of a tax included in Schedule I namely (1) a tax on land put to uses other than agricultural; (2) a tax on succession or acquisition by survivorship in a joint family; (3) tax on any |