Page:White Paper on Indian States (1950).pdf/93

 of agreements with a number of States for concurrent taxation within their frontiers, or, in default of such agreement, the establishment of some system of internal customs duties—an impossible alternative, even it it were not precluded by the terms of the Crown's treaties with some States. Worse than this, India may be said even to lack a general customs system uniformly applied throughout the sub-Continent. On the one hand, with certain exceptions, the States are free themselves to impose internal customs policies, which cannot but obstruct the flow of trade. Even at the maritime ports situated in the States, the administration of the tariffs is imperfectly co-ordinated with that of the British-India ports, while the separate rights of the States in these respects are safeguarded by long-standing treaties or usage acknowledged by the Crown. On the other hand, tariff policies, in which every part of India is interested, are laid down by a Government of India and British-India Legislature in which no Indian State has a voice, though the States constitute only slightly less than half the area and one-fourth of the population of India………

185. Finally, there was the urgent need to accord some measure of immediate financial assistance to some of the States in connection with their increasing burden from having continually to subsidise the sale of food-grains at prices which would be within the reach of the consumer. It was clear both to the Government of India and to the States and Unions themselves, that apart from some ad hoc, temporary assistance in this respect, it was impossible for the Centre to systematize subsidies and other forms of financial assistance to the States on any planned basis, without first considering the central problem of the financial relationship between them and the Centre. It was evident that unless the Centre had the same sources of revenue and the same responsibilities for the discharge of federal functions in States as in Provinces, it would not be