Sir, I do not propose to detain the House by going over each item in the provincial list. I would like to draw attention to the items in List I, namely, the Central sphere. Let us analyse those items to find out whether it is administratively possible to realise those taxes if they am placed in the provincial sphere and whether, if they are assigned to the provinces, the urgency of developing the economic resources of the country, would be met. Central Taxation begins from item No. 77 in List I. Taxes on income other than agricultural income. It is well known that business exist of the same person or firm or Company in different provinces. It sometimes happens that the Main or Head Office of a company is in one province whereas the manufacturing concern exists in another province. All these difficulties and the need for uniformity really necessitate that taxes on income can only be fixed and recovered by the Central Government. I hope, Sir, that there is nobody here who will say that taxes on income or corporation tax which is item 73 can be assigned to the Provinces. If you do that, there will be a race between different provinces as did happen in the case of certain States in America. Different rates of tax were levied in different States for the purpose of either attracting business to certain States and for preventing other States from developing the same as well as for well-developed States to get unduly more income from certain industrial concerns and other sources of income. It is therefore highly desirable that taxes on income and corporation tax should go to the Centre. In the past, the proceeds of that tax have been distributed among the provinces, and I have not the slightest doubt that it was correct. In paragraph 6 of the Report the last sentence–which again was laughed away by Sir Ramaswamy Mudaliar-says that provision should be made for an assignment or a sharing of the proceeds of some of these taxes on a basis to be determined by the Federation from time to time. “From time to time” are particularly the words at which Sir Ramaswamy laughed. But I say it must be from time to time. The needs of different provinces vary from time to time and according to the circumstances, the Central Government has to see to it that a Provincial Government is not put to any difficulty. May I remind the House of the very sad circumstances in which Bengal was placed in the famine of 1943 ? If provision did not exist that the proceeds of taxes could be distributed according to the needs of Provinces from time to time, what would the position of Bengal have been if the Central Government did not come to the rescue of that Province in year 1943 and thereafter? We are on the verge of a famine in Northern India at the present moment. Who can visualise, who is there bold enough to visualise, that the needs of Northern India will not be greater in the near future than the needs of the other Provinces ? Therefore, Sir, some elasticity has to be given to the Central Government for the purpose of determining from time to time the needs of the different provinces and the different units. There are some provinces who are more industrially advanced than others and it, is necessary for us to see that the more backward provinces have to be brought as much as possible on a level with those who are higher developed, Their demands proportionately may in future be greater not only for the purpose of development of industries and agriculture but as well for the purpose of developing health, education and the other nation-building activities which Sir Ramaswamy Mudaliar stressed. It is no use criticising the authors of the report who have giving due attention to every word appearing in the Report and then laughing at it without devoting properly the attention we are able to give and the wisdom which peoples like Sir Ramaswamy is able to bestow with his international experience and his experience for a long time as Member of the Executive Council of the Government of India. He referred to the Nasik Printing Press as a fruitful source of revenue for the Central Government. At that time Sir Ramaswamy Mudaliar was loud in speaking about the sterling balances of India and explaining that they were a valuable property for our country and today when the same Sir Ramaswamy Mudaliar talks of the packing away of our currency he conveniently ignores the existence of those very sterling balances about which he used to be so loud in proclaiming their advantages and selling the goods of our country to England at much lower costs than England would get any where else, lower than controlled prices, and by other means, and it was only at the lower prices that our sterling balances are composed of, and now he tries to draw our attention to the Nasik Printing press, while at the same time, telling us that he is not in favour of inflation. The finances of a country are of a very delicate nature. Does lie know what is the condition of the finances of our country at present. Formerly, the Government of India Could go into the financial market and borrow to then extent of Rs 100 to 150 crores per year, but what is the state of things that we see at present. The Reserve Bank in order maintain the price of Government securities has got always to be in market and purchasing Government securities instead of having the courage or go the market for the purpose of raising loans. It is necessary, in the interests of our country as also in the interests of the Provinces and also in the interest of every individual which the population of the Provinces is composed of, that our Central Government which is to look after the Defence which is to look after the development of industries, which is to help agriculture by means of irrigation, hydro-electric installations and by other methods should be strong and that we should not in any way weaken the Centre on theoretical arguments. Similarly, Sir, you will see that all the taxes that are put in the Central List are only such as can be conveniently administered by the Centre, as are necessary for the sake of uniformity in the different provinces and as are absolutely essential for the purpose of the development of agriculture, industry, etc. We have got to build a large mileage of railways, we have got to have we have got to develop so many things, which can only be done by the Centre and unless each one of these items is properly developed, we shall neither have our freedom maintained nor will it be possible for us to develop either education or health or agriculture or any of the other nation-building activities that we are all so anxious that we should develop. Ultimately, Sir where is it that the proceeds of these taxes go to ? Is the Central Government which is representative of the country at large, which is responsible to the Central Legislature, on which the representatives of all the Provinces will sit and Determine as to how the proceeds of the taxes are to be spent–are they going to allow the Central Government to fritter away the proceeds of the taxes instead of utilising them in the best interests of the country ? They will utilise them in the best interests of the country either directly or by distributing a share of the proceeds of these taxes among the Provinces, which again will be in duty bound to spend them for the uplift of the country at large. Therefore, I appeal to all my esteemed friends here not to be carried away by this slogan of Centre versus Provinces, and to consider deeply in their minds what is in the best interests of the country. Let us maintain our freedom, and therefore, build up our defence. Let us maintain our resources, build up more and more concerns so that we can develop the total wealth of the country at large. It is only on the basis of that total wealth of the country that we can build up the edifice of education, health, culture, art and all those factors which go to make the life of every individual rich, beautiful and happy. (Cheers)
