Page:Indian Journal of Economics Volume 2.djvu/615

 EOONOMIO DEVELOPMENT be exceeded after ten or twelve years. schemes are held up indefinitely for want When we take into account revenue, but also the very large Yet these of funds: not only the direct increase of social income which all well conceived we may remember that it is roads and bridges and even public works create, advantageous to build irrigation works which yield nothing in direct revenue, or-at any rate less than the interest great advantage Government obtains part due on their' cost, because of the which accrues to the population. of this increase of social income in the form of indirect revenue--not only by increase of the land revenue, which is taken into account-in calculating the return on the capital outlay for irrigation works, but also through other sources of reyenue, such as income tax, railway earnings, and customs duties on foreign trade created by the increase of wealth. It is bad economy, therefore, to postpone the construction of public work' of any productive character merely because 6 per cent per annum would hae to be paid to obtain the necessary capital. Besides the highly important economic aspect of this questio. n of provincial borrowing, there is also a .political aspect. One great object of the constitutional reforms now pending is to achieve a real devolution, not only of functions, but also of responsibility and inititative. But it is a commonplace that the real control always lies in the hands of the man who holds the purse: and if provincial governments will still be required to obtain all their funds for large public words by borrowing only from the Govern- ment of India, the latter will retain almost as much control as at present. The Government o! India can never hae funds sufficient to meet a fourth part of the demands which will be made on it by the newly vitalized provincial .governments. No hard and fast