India's War Finance And Post-War Problems

WAR FINANCE AND POST-WAR PROBLEMS, BY YAMAN GOYIND KALE, M. A., Professor of History and Economics, FERGUSSON COLLEGE, POONA, Author of Indian Industrial and Economic Problems, Indian Administration, Qokf ale and Economic Reforms Indian Economics c. POONA Printed at be Aryabhushan Press. 1919. BY THE SAME AUTHOR, 1. Indian Administration. An exposition of the principles and machinery of the governance of India. Third edition, thoroughly reviled, enlarged and brought nj-to-date. 2. Indian Economics. A text-book on the principles of the Ecdmraics of India. 3. Gokbale and Economic Reforms. A thirty yewre-review of the financial and eco nomic development of India and an ac connt of Mr. Gokhales work in that con nection. 4. Indian Industrial and Economic Problems. Thoughtful essays and papers on some of the most important economic problems of the day. d at the Aryabhushan Press, Poona, by Anant Vinayak Patwardhan and published by Varaan Govind Kale, at the Fergusson College, Poona. TO THE MEMORY OF MAHADEO GOVIND RANADE whose f et I had the privilege of sitting in the humble capacity of a reader and from whom I received inspiration and guidance for the study of pubffifc questions and the service of the mother country . PREFACE. The social fabric has been shaken to its very foundations more or less in all nations by the impact upon it of conditions and ideas generated by the war, and now that hostilities have ceased, reconstruction and readjustment are in progress every where. India contributed generously to the conclusion of the struggle to a successful issue and the effects of the war upon her have been of a far reaching character. Her systems of expenditure and taxation, currency andexchange. banking and trade, were put to a severe strain on account of the sacri fices she made for the victory of the cause for which the Empire and its Allies fought and the need of reconstruction in her social, economic and politi cal institutions has come to be urgently felt. It is the object of the following pages to describe how India served in the war by rendering assis tance to maintain the conduct of the struggle at a high level of efficiency, how her finance and currency were constantly adjusted with that supreme end in view and how in the light of the experience of the past five years, certain reforms have become imperatively necesssry in her finan cial and economic organization. At the desire of the editor of the Servant of j., idia, I planned a series of articles reviewing the financial administration of Sir William Meyer on the eve of hi retirement from office of Finance Member. As I wrote, I found that the subject grew on me nd that it was not possi ble to do justice to it in the limited scope that was allowed by a few newspaper articles. I, therefore, decided to extend the plan and to deal more com prehensively with the different aspects of the financial and cognate problems which required discussion, and the result is the book now present ed to tho public An attempt is made in the following pages to give the student and the general reader a clear idea of the ways in which Indias methods of finance, currency, exchange arid banking were adapted to the requirements of the war and t. o show what improvements are need ed in them in order to place this country on the path of healthy economic development particularly in the new era which is dawning upon the world. FergussonCollect p, Poona. v P January, 19 9. j V CONTENTS. PAGES. CHAPTER I. Introductory ... ... ... 1-14 CHAPTER II. On the Outbreak of the War ... ... 15-33 CHAPTER III. Indias Services to tho Empire ... 34-47 CHAPTER 17. Growing Sacrifices of India ... ... 48-63 CHAPT3R V. The Call and the Response ... ... 68-81 CHAPTER VI. Retrospect and Prospect ... ... 82-95 CHAPTER VII. Taxation and Expenditure ... ... 96-116 CHAPTER VII L Currency and Exchange ... ... 117-134 CHAPTER IX. Public Debt and Brnking ... ... 135-148 CHAPTER X. Conclusioa ... ... ... 149-153 Indei ... .....