to one of 1,640,000l. But it was pointed out by Sir E. Law that the saving of 1,185,000l. in the Army Services, to which this increase was mainly due, was quite fortuitous, as it arose almost entirely from the employment of a part of the Indian Army in South Africa and China, the charges for which were borne by the Home Government. It may be added that during the year the drawings of the Secretary of State were reduced from 16,000,000l. to 13,000,000l., and the remaining 3,000,000l. required to meet the Home charges were raised by a sterling loan in England of 3,000,000l. But for this, there would have been at the close of the year 1900-1 not a substantial surplus, but a very serious deficit. The Budget Estimate 1901-2.- Although this Estimate showed only a net increase in revenue of 71,9001. over that given in the revised Estimate 1900-1, there were considerable variations under several heads in the figures for the two years. Those under which an increase was anticipated were: Land Revenue, 474,800l., owing to a hoped-for cessation of famine; Railways, 331,4007., due chiefly to the inclusion of gross instead of net receipts from the Great Indian Peninsula Railway for twelve months in the coming year, as against nine months in the closing year, and also to some extent to increased mileage opened to traffic; increase in Provincial Rates, 160,800l., and in Tribute from Native States, 62,6001. Other minor improvements make up the total increase to 1,086,500l. A decrease was anticipated in opium of 589,300l., as the high prices of the preceding year were not likely to be maintained; in Customs of 130,100%., as the import of sugar in 1900-1 was abnormally large; in irrigation of 127,400l., as, if the season is better, less water will be required by agriculturists; other minor variations amounting approximately to 161,800l. raise the total anticipated decrease to 1,014,600l. Deducting this decrease from the increase, the result is an anticipated net increase of 71,900l. as already stated. The increase under the various heads of Expenditure amounted to a total of 4,446,900l., of which the chief items were Army Service, 2,062,1007.; other Public Works, 728,4007.; Railways, 652,400l.; direct demands on revenue, 161,6007.; salaries and expenses of Civil Departments, 493,2001. ; miscellaneous civil charges, 123,900l. On the other hand, the estimated charges on account of famine show a decrease of no less than 3,245,000l., and the net increase in Expenditure is only 1,131,9001. The net result of the Budget is an estimated surplus of 690,900. Capital Account.-The total estimate for Capital Expenditure (not chargeable to revenue) on Railways and Irrigation amounted to 5,395,600l., of which sum 2,019,400l. was for State Railways, and 2,709,500l. for the account of Railway Companies, the balance being for Irrigation Works. In addition to this 301,900/. was required for discharging temporary debt; provision had also to be made for other minor Capital Expenditure, including an overpayment in India of 330,2001. on account of Secretary of State's bills, and the total of Capital Requirements amounts to 6,642,000. To meet this outlay there was the surplus of 690,9001., and a sum of 1,663,400l. raised by Railway Companies. It was proposed to provide 2,240,000l. by addition to the permanent debt, of which sum two crores of rupees was to be raised in India; 502,500l. was to be added to the unfunded debt, and 111,2001. was to be repaid from loans and advances. These sums amounted in the aggregate to 5,208,000l., and the balance required to meet the total Capital Expenditure of 6,642,000l. was found by a reduction of 1,434,000l. in our closing balances in India and England, which would stand on March 31, 1902, at 10,500,3271. in India and 2,605,9431. in England. In his minute Sir E. Law explained that, although closing balances were large, it was necessary to have recourse to a loan, partly because the money is required in the early part of the financial year, and the revenue only comes in freely during the last four months, and partly because it is to the advantage of the trading community that the balances should be maintained at a high figure during the busy season. As regards the increase in the Military Expenditure, he pointed out that out of a total of about 160 lakhs 127 lakhs were non-recurring; they included a provision of 94 lakhs on artillery, rifles, ammunition and ordnance stores; 8 lakhs for the establishment of the gun-carriage factory at Jubbulpore and the cordite factory in the Neilgherries, and 21 lakhs for the establishment of an efficient transport service, including the purchase of animals. In dealing with the charges for Railways, Sir E. Law said that special attention had been given to rendering the existing railways more efficient, by the provision of additional rolling stock and other requirements necessary for their satisfactory and profitable working. large outlay on this account and the falling off in receipts anticipated from the diminution of famine, makes the net result of the working of the railways during the coming year a loss of 164,800. But if we take only the traffic receipts, 18,427,600l., and the working expenses, 8,655,300l., the result is a profit of 9,772,300l., which is a little better than that of the preceding year. The Although the estimated famine charges show a great reduction, one of over 3,000,000l. sterling, on those of the preceding year, the Government has still been called upon to provide a crore of rupees for direct famine expenditure in the current year, and it is doubtful if even this will be sufficient. What has been the indirect cost of the famine both to the Government and to the people can never be really estimated, but up to the close of the last financial year the direct cost to Government had been Rs. 6,33,76,000 for famine relief, Rs. 1,47,16,000 in remissions and suspensions of land revenue and provincial rates, Rs. 66,03,000 for compensations for dearness of provisions and other charges, making a total of Rs. 8,46,95,000. In addition [1901. to this Rs. 4,11,00,000 have been provided for loans to Native States and Rs. 1,42,00,000 for special agricultural advances, so that the total expenditure has amounted in round numbers to 14 crores. Sir E. Law said that as the countervailing duties on bounty-fed sugar only came into force in May, 1899, and as the circumstances of the past year had been exceptional, it was impossible to form a definite opinion as to their permanent effect. For the eleven months of 1899-1900 during which they were in force they produced Rs. 8,17,555; for the first ten months of 1900-1 the income was Rs. 15,29,552, and it was anticipated that this would be raised to 17 or 18 lakhs by the close of the year-a sum raised without any cost to the people of India: it was paid entirely by the European taxpayers, taxed by their respective Governments to provide the bounties which enable foreign sugar producers to sell their sugar in India at prices below the cost of production. The Indian consumer pays no more for his sugar than he would do if the bounty system were abolished. Exchange had continued steady throughout the year, practically at 1s. 4d. to the rupee. The highest price at which Council Bills were sold was 16-307d., the lowest 15 933d., and the average was 15.979d. Although an addition of some 14 crores had been made to the rupee currency, this had been done, not for the sake of the profit on coinage, but merely to meet the actual requirements of the country. Since January 1, 1901, the profits on coinage had been paid into the Gold Reserve Fund, and although the profits for the preceding nine months had been used temporarily to meet pressing needs they would eventually be paid to the same fund as soon as the Government was in a position to do this. The repayment of the 4 lakhs advanced to Native States for famine expenditure was mainly looked to for this purpose. The position of the Government as regarded note circulation, rupees and silver bullion in the Currency Reserve, gold in the Currency Reserve and gold in the Gold Reserve Fund, on March 7, was as follows: Rupees in the Currency Reserve. Value of silver bullion in the Currency Reserve. Notes in circulation Gold in the Gold Reserve Fund Total silver Total gold Rs. 5,87,12,865 £6,956,946 The desirability of extending the paper currency was fully recognised; the main obstacle to such an extension is the difficulty, if not impossibility, of providing at small and distant treasuries a sufficient supply of rupees for the cashing of all notes that might be presented. Economic Progress.-After thus reviewing the financial situation, Sir E. Law proceeded to consider the economic situation. He regarded it as a most important and satisfactory fact that, notwithstanding the heavy charges on account of famine, he was able to present a Budget which showed a surplus without imposing any new taxation. Although there had necessarily been great losses of land revenue in the districts afflicted by famine, the returns showed that the Punjab, Bengal and Madras had been doing well, that Assam had held its own, and that Burmah had enjoyed great prosperity. A comparison of the returns for the last four years for Salt, Customs, and the Post Office afforded proof of economic progress. Two important branches of agriculture, Indigo and Tea, were passing through a crisis, but it was hoped that this was only temporary. Indigo had suffered much from the competition of a foreign chemical product, and the large profits of old days are no longer possible. But it is believed that, by greater care and the use of improved methods in cultivation and manufacture, fair profits may still be made. The tea industry in India has always shown great fluctuations, and the present depression is attributed to overproduction. Of the manufacturing industries the most important, Cotton, was passing through a period of considerable depression, but this was the only one which was in any difficulty, and the increase in the number of important factories and workshops was most encouraging. Between 1895 and 1899 the number of cotton factories had risen from 350 to 586, that of engineering workshops and foundries, including railway workshops, from 72 to 82; that of jute mills and presses from 62 to 82; that of rice mills from 65 to 84; and that of sugar factories from 9 to 14. Notwithstanding the depression in the cotton industry, the value of the machinery imported during the last five years was some 75 lakhs in excess of the value of that imported during the previous quinquennial period―equivalent to an increase of nearly 30 per cent. But the most satisfactory figures were those relating to the production and export of coal, which rose from 222,380 tons in 1897 to 490,490 tons in 1900. Between 1895-6 and 1899-1900 the balance at the credit of depositors in Savings Banks and Provident Institutions increased by Rs. 1,88,111. It was difficult to draw any definite conclusion from the statistics relating to trade as apart from industries, but the fact that, notwithstanding the depression caused by the famine, the total value of imports and exports for the year 1899-1900 was only a little less than for 1898-9, and considerably in excess of the preceding years, was regarded as proof of commercial strength. The economic situation is regarded as on the whole good, and as affording many and satisfactory proofs of recuperative power. In the course of the discussion on the Budget in the Legislative Council on March 27, Sir E. Collen, the Military Member of Council, explained that the question of putting the Army into a really efficient condition had been most thoroughly considered, in the first instance, by the military authorities, and they had submitted their proposals to the Government in March, 1900. The initial expense was in round numbers 350 lakhs or 2,333,3331., of which 1,360,000l. was for the rearmament of the native Army and Volunteers, and it was intended that this should be completed in three years. There was to be an increase in the number of British officers for the Staff Corps, and twentysix British officers and twenty-one warrant officers, with a proper complement of subordinates, were to be added to the transport. The whole Transport Service had been so organised as to be capable of expansion when required, and provision had been made for many matters connected with mobilisation. REMARKS. The financial position of India as shown by the Budget presented by Sir Edward Law would appear to be briefly this: the year 1900-1, though ending with an apparent surplus of more than 1,500,000l., would have ended with a serious deficit but for wholly fortuitous savings in the military expenditure and the raising of 3,000,000l. by a loan. But this deficit was caused entirely by the enormous cost of the famine, amounting to over 5,000,000l. sterling. Had there been no famine, or only a slight one, the revenue would have been more than sufficient to meet all ordinary expenditure. For 1901-2 it was anticipated that without imposing fresh taxation the revenue would be sufficient, not only to meet ordinary charges, but also to a great extent to repair the damage caused by the famine last year, to meet a greatly reduced charge for famine this year, and to provide some 2,000,000l. sterling for improving the efficiency of the Army. Since Sir Edward Law presented his Budget the monsoon has come and gone-it cannot be said to have been a good one; parts of the country have had good rain, but in those parts which required it most, the Central Provinces, Rajputana, the northern parts of Bombay and Gujerat and the south-east of the Punjab, there has been a serious failure. It seems probable that the famine charges during the current year will exceed those entered in the Budget; but Sir E. Law's opinion that the economic condition of the country, as a whole, is sound, and that general improvement may be looked for, would appear to be well-founded, and it is not likely that the year will close with a deficit. THE FAMINE. The famine cannot be said to have ceased. As remarked in reviewing the Budget, the monsoon failed in those parts of the country where rain was most required, and towards the end of the year relief works had to be opened there. As yet the distress is not very severe. Official figures showed that in the week ending Dec. 28 the number of persons on relief works (with their dependants) was 104,391, and the total of those receiving direct or |