the Budget for 1927-28 the amount so provided was Rs. 495'80 lakhs.

Since 1921-22 substantial reductions have been effected in the expenditure on the Military services. The actual net expenditure as shown in the final accounts or as estimated, where the accounts are not yet closed, is indicated in the following statement :

The accounts of years prior to 1923-24 were affected by abnormal conditions, such as operations on the North-West Frontier and in Waziristan, and have also been disorganised by miscellaneous adjustments of war expenditure, but from the year 1923-24, in which the recommendations of the Retrenchment Committee were carried out, the amounts may be taken expressive of expenditure on a scale approaching that of a normal post-war establishment.

as

It has been decided, after consideration of the Report of the Army Accounts Committee, to revert from 1st April, 1927, to a system of estimates and accounts, including appropriation accounts, which will deal solely with the actual cash grants allotted and spent for the maintenance of the Army. Stores accounts, maintenance accounts, and accounts on commercial lines for factories and other manufacturing establishments will also be published.

The Revised Estimate of net expenditure on the Army for 1926-27 exceeds the original budget figure by Rs. 55 lakhs. The excess is due to an additional provision of Rs. 70 lakhs for the replacement of a serious shortage in ordnance stocks, to an extra payment of Rs. 24 lakhs to the War Office falling due in the year as the result of a new arrangement for the adjustment of claims connected with allotments and marriage allowances drawn by the families of British soldiers, to excess expenditure of Rs. 10 lakhs on account of a rise in prices of forage articles, and an increase of Rs. 6 lakhs for sea transport and packet passages. On the other hand savings have been effected of Rs. 28 lakhs in pensions and noneffective charges, Rs. 9 lakhs in rail and travelling charges, Rs. 12 lakhs as the result of shortages in establishments, and Rs. 9 lakhs on account of free issues of water, ice and electricity by the Military Engineer Services.

For 1927-28 the Military Services Budget Estimate is Rs. 54.92 crores, a reduction of Rs. 63 lakhs on the Revised Estimate for 1926-27. Compared with the Budget for 1926-27 additional provision amounting to Rs. 80 lakhs has been made for the purchase and manufacture of ordnance equipment and other stores, the charges for sea transport and packet passages have been increased by Rs. 27 lakhs, and a further Rs. 6 lakhs has been allowed for the expansion of the Royal Air Force. In the other direction is a saving of Rs. 64 lakhs in the payments of gratuities to demobilised officers, and a saving of Rs. 52 lakhs on account of charges for issues of electricity, water and ice to Army units and formations by the Military Engineer Services, which charges, under the new system of accounts referred to above, are not debitable to the Army with effect from April, 1927. There are also reductions of Rs. 17 lakhs in pension charges, Rs. 18 lakhs on rail and travelling charges, and Rs. 13 lakhs on charges for pay of British Officers and soldiers. In 1927-28 the usual transactions in respect of Aden have been eliminated from the accounts and their place taken by a contribution payment to the British Government of £250,000.

The statement below gives particulars of Army charges, which form the most important part of the charges grouped together in the preceding table.

The figures for the years 1925-26 and 1926-27 cannot be classified under the new heads to be adopted from 1927-28.

Marine.-Provision has been made on the basis of the existing organisation with an addition for the extra cost of the Royal Indian Navy.

Military Engineering Services.-The provision for 1927-28 includes an additional Rs. 20 lakhs mainly for the acceleration of the programme of building and electrification of lines for Indian and British troops. The remainder of the increase as compared with 1926-27 is due mainly to the change in accounting from April, 1927, under which Military Engineer Services will not take credit for issues of electricity, water and ice to Army units and formations.

APPENDIX II. (a).

HOME CHARGES.

The following is an analysis of the Net Expenditure in England charged on the Revenue of the year :

From 1927-28, consequent on the transfer of Aden to the Imperial Government with effect from 1st April, 1927, the receipt from the War Office ceases and a contribution as shown, is payable by India.

Expenditure in England not charged on the Revenue of the

Including £2,575,000 Capital Stock of the Great Indian Peninsula Railway Company paid off on termination of the Company's contract during the year.

+ Including £3,000,000, the purchase price of the Delhi-Umballa-Kalka Railway.

APPENDIX II. (b).

RAILWAYS.

(i). Route Mileage and Traffic (including railways outside
Government accounts).

Length of railways open in India on 31st March, 1925

..

Additional mileage opened in 1925-26
Length of railways open in India on 31st March, 1926, after allowing

for corrections due to realignments, etc.

38.269-78 miles 340.76 " 38,579:48 ""