ing to the prevailing or seasonal flow of the upper winds; and India has been asked to undertake the cost and responsibility of providing weather information in the area roughly represented by the triangle Karachi-Aden-Basrah a region singularly poor at present in communications and in conveniences for starting and maintaining upper air observatories. A new station has recently been opened at Karachi, partly to provide the information required for aviation work by the Royal Air Force and partly in preparation for the Imperial Airship and Aeroplane services.

The Upper Air Researches of the Indian Meteorological Department, which centre round the observatory at Agra, were carried on throughout the year by measurements of high level winds at Agra and eight out-stations. The Agra results have already been found. to bear close application in daily weather forecasting, and they promise now to be of practical use for the more important purpose of forecasting monsoon rainfall. A number of timely and satisfactory storm warnings were given to ports and shipping, and flood warnings to officers in the Irrigation, Railway and other Departments were isused from Simla as in previous years.

The importance of meteorological research has been receiving the increased attention of the public and the press, and important schemes for increasing its efficiency are now under the consideration of the Government of India. As it is not possible to develope upper air work in Simla, the headquarters of the department are to be transferred to Poona. There is also a further proposal for the reorganisation of the superior staff of the Department which will involve the creation of a number of new posts of Meteorologists and Assistant Meteorologists.

The progress made during the year in certain harbour projects and with the centralization of the administration of ports and shipping may be briefly mentioned here. On an examination of the Expert Harbour Committee's Report regarding the Cochin Harbour Scheme, the Madras Government and the Government of India were satisfied that the experiment of cutting a passage through the bar had been successful, and sanction was given for the scheme's being carried a stage further. A summary of points agreed upon by the Government of India, the Madras Government and the Darbars of Travancore and Cochin for the development of the Harbour was also drawn up and duly signed by the various parties concerned.

The scheme for the development of the Vizagapatam Harbour was sanctioned and the port declared a "Major port" under the Devolution Rules, in order that the project might be financed from the Central revenues. It was, however, decided that the construction of the Harbour should be effected through the agency of the Bengal-Nagpur Railway Company. The Agent of that Railway Company has been appointed ex-officio Administrative Officer for the Harbour Works, and an Engineer-in-Chief placed in immediate charge of the construction. An Advisory Committee consisting of official and non-official representatives has also been appointed to advise the above officers in connection with the construction of the harbour.

Under the Reforms Scheme the subjects of shipping and navigation, lighthouses, port quarantine and marine hospitals and ports declared to be major ports have been classified as ' Central subjects.' As the law now stands, however, the statutory power for the administration of these subjects is vested almost entirely in Local Governments. The result has been that methods of administration vary from province to province. A scheme designed to bring the Government of India into closer touch with the administration of these central subjects was therefore prepared and placed before a Conference of the representatives of maritime local Governments, Major Port Trusts, Departments of the Government of India concerned, and by principal Port and Port Health Officers in November 1924. The scheme was generally accepted and the conclusions arrived at are at present under the consideration of the Government of India.

APPENDIX I.

A SLIGHT DESCRIPTION OF THE PRESENT CONSTITUTION OF INDIA AND A BRIEF SKETCH OF THE INDIAN FINANCIAL SYSTEM.

The first and most striking consequence of the new Government of India Act, and of the rules made thereunder, has been to divide the sphere of Government in the Provinces between two authorities, one amenable to the British Parliament and the other to the Indian electorate. This has necessitated a prior classification of the subjects of Government into the two spheres of Central and Provincial. A number of very important administrative subjects, henceforth technically known as Provincial subjects, have been entrusted to the reformed Local Governments. These include Local Self-Government; medical administration, public health, and sanitation; education; public works and water supply, with certain reservations; land revenue administration; famine relief; agriculture; fisheries and forests; co-operation; excise; the administration of justice, subject to legislation by the Indian Legislature; registration; industrial development; police; prisons; sources of provincial revenue; and many miscellaneous items. The way has thus been cleared for the division, within the Provinces, of the functions of Government between an authority responsible to Parliament and an authority responsible to the electorate. It is hardly necessary to repeat that under the reformed constitution the Provincial Executives now consist of two portions. The first half is the Governor, working with Executive Councillors nominated by the Crown ; the second is the Governor, working with Ministers selected from members of the Provincial Legislature. The first half administers certain subjects known as "Reserved" and is responsible for them to the Central Government and ultimately to Parliament. The second half deals with "Transferred " subjects and is amenable to the Indian electorate. Among the most important of the subjects so transferred to popular control are Local Self-Government; medical administration, and public health; education; public works, under a number of important heads; agriculture; forests and fisheries; co-operation; excise; registration; industrial development; and other minor items. Thus a very large proportion of those administrative subjects on the development of which India's progress depends have now been made over directly to Indian control.

The division of the Provincial Executives into two halves, according to the so-called dyarchic plan, is a constitutional experiment of a hitherto unparalleled kind. With the reasons for its adoption we are not here concerned; it is sufficient to state that in the circumstances amid which India found herself at the time of the Reforms, those in control found it difficult to devise any alternative method of combining stability with progress.

( 339 )

Turning now to the internal aspect of India's finances, we must note that a large proportion of the revenues of the Government of India is derived not from taxation, but from such sources as land revenue, opium, railways, forests and irrigation. The country being still in the main agricultural, Indian revenues are always largely influenced by the character of the season. Up to the. time of the Montagu-Chelmsford Reforms, the Budget of the Government of India was made to include the transactions of the Local Governments, the revenues enjoyed by the latter being mainly derived from sources of income shared between themselves and the Government of India. The Central Government out of these incomings was responsible for defence charges, for the upkeep of railways, posts and telegraphs, for the payment of interest on debt, and for the home charges. The provinces from their income met the expenses connected with land revenue and general administration, with forests, police, courts and jails, with education and with medical services. Charges for irrigation and ordinary public works were common both to the Central and to the Provincial Governments.

This state of affairs has passed away as a result of the changes introduced by the Montagu-Chelmsford Reforms. The authors of the Reforms had urged the necessity of complete separation between the finances of the Central Government and those of the various Provincial Governments. Their main recommendations were that no head of revenue should continue to be divided; that land revenue, irrigation, excise and judicial stamps should be completely provincialized; and that income-tax and general stamps should become central heads of revenue. Inasmuch as under this re-arrangement the Government of India would lose heavily, the scheme proposed that contributions should be levied on the provinces to make up the deficit. A Committee was appointed in January 1920 to investigate the financial relations between the new Central and Provincial Governments. The Committee proposed that receipts from general stamps should be credited to the provinces and not to the Central Government, and suggested a plan by which the Provincial Governments were to contribute Rs. 983 lakhs (£9.83 millions) to the Central Government in 1921-22. The standard contribution of each Province was also fixed as proportion of the total contribution necessary to make good the deficit of the Government of India. This proportion was 19 per cent. from Bengal; 18 per cent. from the United Provinces; 17 per cent. from Madras; 13 per cent. from Bombay; 10 per cent. from Bihar and Orissa; 9 per cent. from the Punjab; 6 per cent. from Burma; 5 per cent. from the Central Provinces; and 2 per cent. from Assam. The Committee recommended that contributions should be adjusted to this standard percentage by equal increments, contributions extending over a period of 7 years. These recommendations were not accepted in full by the Joint Select Committee of Both Houses of Parliament. It was finally settled that from the year 1922-23, a total contribution of £9.83 millions (Rs. 983 lakhs), or such smaller sum as may be determined by the Governor General in Council, shall be paid by the Local Governments, provision being made for reduction when the Governor General in Council fixes as the total

amount of the contribution a sum smaller than that payable in the preceding year. Unfortunately, at the time of the inception of the Reforms and for some years afterwards the Provincial Governments, in common with the Central Government, underwent severe financial straits. Their expenditure was on the up grade, and the non-co-operation agitation had a baneful effect on some of their items of revenue, such as excise and stamps. It is therefore not astonishing that in most, if not all, provinces, there grew up a strong feeling against the system of Provincial contributions which was an integral feature of the financial arrangements under the reformed constitution. This feeling was most vocal in Bengal and Madras. Though the Central Government could not contemplate with any satisfaction the loss in their revenues entailed by the remission or reduction of any contributions-since their own financial position was itself precarious-yet it was felt that the case of Bengal was peculiar and eventually the Indian Government had to remit the Bengal contribution for a term of years.

Since the first days of the Reforms, however, a revolution has taken place in the state of Indian finances and for the past two years the Indian Government have had surpluses where formerly they had heavy deficits. The Financial Relations Committee laid down a regular programme for the abolition of the Provincial Contributions when the state of India's finances should make this possible. The first two stages of this programme have been carried out and almost half of the total amount of the Provincial Contributions has now been remitted. The prospects seem bright for further remissions of Provincial Contributions and it is to be hoped that their total abolition will be witnessed in the not very distant future.

N