Page:White Paper on Indian States (1950).pdf/94

 possible to deal with the problem of financial assistance in any satisfactory manner, especially if such assistance was to be on the same basis and on the same principles as were applicable to the Provinces.  

186. The problems which thus arose for solution in the field of federal finance in relation to States and Unions were both difficult and complicated; and the Government of India felt that it would be desirable to examine them systematically, in detail. Accordingly, by a Resolution dated 22nd October 1948, the Government of India appointed a Committee of experts (hereinafter referred to as the Indian States Finances Enquiry Committee) consisting of Shri V. T. Krishnamachari (then Diwan of Jaipur) as the Chairman, and Shri S. K. Patil and Shri N. Dandeker, I.C.S., as members. The Committee's terms of reference were as follows:—

(1) the present structure of Public Finance in Indian States and Unions of States;

(2) the desirability and feasibility of integrating Federal Finance in Indian States and Unions of States with that of the rest of India, to the end that a uniform system of Federal Finance may be established throughout the Dominion of India;

(3) whether, and if so, the extent to which, the process of so integrating Federal Finance in the Indian States and Unions with that of the rest of India should be gradual and the manner in which it should be brought about; and the machinery required for this purpose, especially as regards the legislative groundwork and the administrative organisation necessary for the imposition, assessment and collection of federal taxes;

(4) the results of such a policy of integrating Federal Finance upon the finances of Indian States and Unions and the consequential financial adjustments and relations which should subsist between the Governments of the Indian States and Unions on the one hand and the Government of India on the other;

(5) the measures which the Committee may consider necessary and/or desirable for revising in the light of present day