State of Indian finance

THE feature of the Financial Statement presented by the Finance Member to the Legislative Assembly that is necessarily the first to attract attention is that after several consecutive years of deficit, the Government of India has for two successive years had a realised surplus, and anticipates a surplus also in the ensuing year. Some idea of the change in the financial position of the government may be formed from the fact that in the five years from 1918-19 to 1922-23, the total amount of the deficit was no less than Rs 100 crore. Even in 1923-24, the revised estimate pointed to a deficit on ordinary account, though the deficit was in this case small, but the actual results disclosed a small surplus. The position was maintained in 1924-25, when the government was able to reduce the hated salt duty. The budget for the ensuing years shows further progress along the same line. As against a total estimated revenue of Rs 133.68 crore, the total estimated expenditure is Rs 130.44 crore. Of course, the whole of this is not true recurring surplus. As the Finance Member explains, Rs 2.27 crore of this surplus represents receipts of a non-recurrent character. On the other hand, there is a non-recurrent item of expenditure in the military budget to the tune of Rs 1.71 crore. Deducting the one from and adding the other to the anticipated surplus, the Finance Member concludes that “in any case, Rs 2.68 crore of the surplus represents a true recurring surplus.” The surplus in the coming years is bound to be larger because, as he points out, there is “the possibility of a continued reduction in military expenditure”.