In framing the lists the Committee have treated as All-India subjects certain large general heads, such, for instance, as commerce and laws regarding property, but have taken out of these and allotted to the provinces important sections—e.g., in the case of the first Excise, and in the case of the second laws regarding land tenure. Any matter included in the provincial list is to be deemed to be excluded from any All-India subject of which otherwise it would form part. Subjects not expressly included in either list are regarded as All-India subjects, but the Governor-General in Council may add to the provincial list “matters of merely local or private interest within the province.” It is claimed that the scheme has been devised on such a basis as to leave the way open for the process of development.

The list of subjects to be transferred to Indian Ministers is on the whole more extensive than the suggested list attached to the Joint Report. With certain reservations University education is to be transferred, as well as primary, secondary, and technical, on the ground that the educational system must be regarded as an organic whole. But European and Anglo-Indian education, which is organized on a separate basis is excluded from the transfer.

The decision of the functions of the Provincial Government, popularly known as diarchy, has been criticized as likely to lead to friction, and sometimes to deadlock. To mitigate these difficulties, the Committee propose important changes in the relations of the Governor with both sections of the Government. It is to be the duty of the Governor in Council in the case of reserved departments, and of the Governor and Ministers in the case of transferred departments, to take care that the administration is so conducted as not to prejudice or occasion undue interference with the working of any department falling in the other category. The Governor has to decide whether a particular matter falls within the scope of a reserved or a transferred department, and to take care that any order given by the Governor-General in Council is complied with by the department concerned.

Governor’s Increased Powers

In the case of disagreement between the Executive Council and Ministers as to action which appears to the Governor to affect both a reserved and a transferred department, the Governor is to give such decision as the interests of good government may seem to require, provided that, in so far as circumstances admit, before such decision is given the matter should be considered by both sections of the Government sitting together. If the Minister remains obdurate, it will be for the Governor to dismiss and find another Minister.

If, owing to a vacancy, there is no Minister in charge of a transferred department, the Governor will certify that such emergency exists and that immediate action is necessary. On such certificate being given, the Governor in Council will have authority to take action, subject to the obligation of reporting to the Governor-General in Council. In other words there will be re-entry for a temporary and limited purpose during an interregnum. This is a considerable departure from the proposal of the Joint Report that Ministers shall hold office for the lifetime of the Legislative Council. The power of the Governor to dismiss a Minister, says the report, “seems essential if deadlocks are to be avoided.” The over-ruling of a minister will depend in the last resort on the Governor’s personal judgment of the situation.

Finance

The Committee felt themselves precluded from considering any modification of the proposals of the Joint Report for the separation of the finances of the Government of India and of Provincial Governments. No opinion is expressed on memoranda received at a late stage from Sir James Meston making proposals for substantial departure from the plan of dealing with provincial finance set forth in the Joint Report.

It may be recalled that Mr. Montagu and Lord Chelmsford proposed that, if the residue of the provincial revenues is not sufficient, it should be open to Ministers to suggest fresh taxation. The Committee take the view that when any new provincial tax or any proposed addition to an existing tax requires legislation to give effect to it, the decision whether that legislation should be undertaken must rest with the Governor and Ministers. Since the whole balance of the revenues of the province will be at the disposal of the Ministers for the administration of the transferred departments, the Committee consider that when an existing tax cannot be reduced or remitted without legislation, the decision whether legislation should be undertaken must also rest with the Governor and Ministers. To that extent taxation for provincial purposes should be regarded as a transferred subject.

The assessment or collection of the tax would be reserved or transferred, according as the agency employed belonged to a reserved or to a transferred department. The view is also taken that, when alterations in taxation can be effected without any change in the law, the decision whether any alteration should in fact be made must be recognized as resting with the Governor in Council if the department is reserved, and with the Governor and Ministers if it is transferred.

In respect to the powers of borrowing on the sole credit of provincial revenues which are to be conferred, the Committee propose that, if after joint deliberation there is a difference of opinion between the Executive Council and the Ministers, the final decision whether a loan should be raised and as to the amount of the loan must rest with the Governor.

The Public Services

Detailed proposals are made in relation to the public services, to be classified as Indian (All-India), provincial and subordinate, No service is to be included in the first of these categories without the sanction of the Secretary of State, while the demarcation between the provincial and subordinate services is to be left to the provincial Governments.

General approval is given to a scheme prepared by the Government of India providing that legislation should be undertaken in Parliament to declare the tenure and provide for the classification of the public service. It should secure the pensions of the All-India services, and should empower the Secretary of State to make rules for their conduct and rights and liabilities, and to fix their pay and regulate their allowances. Similar legislation should be passed by the Government of India in respect to the provincial services, and to empower the provincial Governments to make rules for the subordinate services. The Committee does not express any opinion on the proposal of the Government of India to set up a statutory Public Service Commission on lines somewhat wider than those of the Civil Commission in Great Britain.

Among the clauses suggested for insertion in the instructions for each provincial Governor is one enjoining him to “protect all members of the public services in the legitimate exercise of their functions and enjoyment of all recognized rights and privileges.”

The instructions are to charge him with the duty of safeguarding the legitimate interests of the Anglo-Indian or domiciled community, and “to take care that no change in educational policy, affecting adversely Government assistance afforded to existing institutions maintained or controlled by religious bodies, is adopted without due consideration.” The Governor is also to be instructed that he “shall not sanction the grant of monopolies or special privileges to private undertakings which are inconsistent with the public interest, nor shall he permit any unfair discrimination in matters affecting commercial or industrial interests.”