Another question that I would like to deal with is the question of the fiscal power, the sharing of fiscal powers between the units and the Centre. The charge has been very generally made in this House that the provinces have been left without any resources, and the Centre has taken away everything. I am afraid I must join issue with this statement that is either made merely because it has got a propagandist value or is made from a superfluous examination of the position as is revealed by the Constitution. What happens today in the provinces is – here I do not want to enter into any controversy with provincial Finance Ministers – that the provincial Finance Minister in order to support their own financial policies have been saying, “we have no money; the Centre would not give us any money; the Centre has got all sources of taxation.” I have heard recently one or two provincial Finance Ministers making the statement that after the introduction of the new Constitution, the provinces will have no financial power whatsoever. I am laying particular emphasis on this criticism because I think it is wholly wrong, wholly inaccurate, and even mischievous. In fact, this Constitution has not made any fundamental change so far as the apportionment of the finances is concerned between the Centre and the units, from the scheme of the Government of India Act. As honourable Members of this House know, we have not been able to have a complete and comprehensive examination of the question. There has been no taxation inquiry in recent times. You, Sir, appointed an expert Committee. It had naturally very limited terms of reference and their report was made in a perfunctory sort of way. Therefore we had to adopt the scheme of the Government of India Act more or less. Now I would like to mention that in a conference between the Finance Ministers and Premiers of the Provinces and the States and some of the Ministers of the Central Government and the Drafting Committee, I put forward the suggestion that the difference between agricultural and on-agricultural property so far as direct taxes are concerned may be done away with, so that it would help in putting more money in the poor : and that, the entire income from income-tax on agricultural income can be handed over to the provinces. A few provincial Ministers did appreciate this suggestion, but the tallest amongst them said that they were not yet ready for the change. So it happens that conditions have more or less forced us to incorporate the provisions of the Government of India Act so far as finances of the Centre and the Units are concerned. It may be that in one or two matters certain restrictions have been placed upon the financial power of the provinces, for example in the matter of the levy of sales tax, but that does not mean that the Centre gets any benefit whatever thereby. It is merely to benefit the economy of this country rather than to benefit the Centre that such restrictions were placed on the levy of sales tax. I cannot understand the basis of the complaints made during the last seven days that this Constitution has deprived the provinces of the initiative because they would have no finances, that the Centre has all the financial resources in its hands, and therefore the Constitution is a unitary one. I would beg honourable Members of this House, most of whom are going to be Members of Parliament in the future, to examine this matter in all seriousness, and here I would like to recall the words of Dr. John Mathai when he appeared before us or rather on the only occasion in which he appeared before us, when he categorically stated that there was really no rivalry between the Centre and the units so far as the financial power is concerned. In reality the Centre’s needs are covered largely by defence, administrative expenses and so on, and the Centre has no territory so to speak in which it has any special interest and on which it might want to spend money.
