Excise.—Excise, like salt, is not only a department of revenue collection, but also to a great extent a branch of the executive. In other words, excise duties in India are not a mere tax upon the consumer, levied for convenience through the manufacturer and retail dealer, but a species of government monopoly. The only excisable articles are intoxicants and drugs; and the avowed object of the state is to check consumption not less than to raise revenue. The limit of taxation and restriction is the point at which too great encouragement is given to smuggling. Details vary in the different provinces, but the general plan of administration is the same. The right to manufacture and the right to retail are both monopolies of government permitted to private individuals only upon terms. Distillation of country spirits is allowed according to two systems—either to the highest bidder under strict supervision, or only upon certain spots set apart for the purpose. The latter is known as the sadr or central distillery system. The right of sale is also usually farmed out to the highest bidder, subject to regulations fixing the minimum quantity of liquor that may be sold at one time. The brewing of beer from rice and other grains, which is universal among the hill tribes and other aboriginal races, is practically untaxed and unrestrained. The European breweries at several hill stations pay the same tax as imported beer. Apart from spirits, excise duties are levied upon the sale of a number of intoxicating or stimulant drugs, of which the most important are opium, bhang, ganja and charas. Opium is issued for local consumption in India from the government manufactories at Ghazipur and Patna in the Behar and Benares Agencies, and sold through private retailers at a monopoly price. Bhang, ganja and charas are three different narcotic drugs prepared from the hemp plant (Cannabis sativa, var. indica). Scientifically speaking, bhang consists of the dried leaves and small stalks, with a few fruits; ganja of the flowering and fruiting heads of the female plant; while charas is the resin itself, collected in various ways as it naturally exudes. The plant grows wild in many parts of India; but the cultivation of it for ganja is practically confined to a limited area in the Rajshahi district of eastern Bengal, and charas is mainly imported from Central Asia. The use of bhang in moderation is comparatively harmless; ganja and charas when taken in excess are undoubtedly injurious, leading to crime and sometimes to insanity. In accordance with the recommendations of the Hemp Drugs Commission, the government of India passed an act in 1896 providing that, in regard to ganja and charas, cultivation of the plants should be restricted as much as possible, and that a direct quantitative duty should be levied on the drugs on issue from the warehouse in the province of consumption; while as regards bhang, cultivation of the hemp for its production should be prohibited or taxed, and collection of the drug from wild plants permitted only under licence, a moderate quantitative duty being levied in addition to vend fees. No duty whatever is now levied upon tobacco in any part of India. The plant is universally grown by the cultivators for their own smoking, and, like everything else, was subject to taxation under native rule; but the impossibility of accurate excise supervision has caused the British government to abandon the impost. In 1907-1908 the total gross revenue from excise amounted to £6,214,000, of which more than two-thirds was derived from spirits and toddy.
Since 1894 a uniform customs duty of 5% ad valorem has been levied generally on imported goods, certain classes being placed on the free list, of which the most important are food-grains, machinery, railway material, coal, and cotton twist and yarn (exempted in 1896). Most classes of iron and steel are admitted at the lower rate of 1%. Cotton goods are taxed at 3½%, whether imported or woven in Indian mills. Special duties are imposed on liquors, arms and ammunition and petroleum, while imported salt pays the same duty as salt manufactured locally. From 1899 to 1904 a countervailing duty was imposed on bounty-fed beet sugar. There is also a customs duty at the rate of about 3d. per 82 ℔ on exported rice. In 1907-1908 the total customs revenue amounted to £4,910,000, of which £664,000 was derived from the export duty on rice and £223,730 from the excise on cotton manufactures.
Since 1886 an assessed tax has been levied on all sources of income except that derived from land. The rate is a little more than 2½% on all incomes exceeding £133 a year, and a little more than 2% on incomes exceeding £66, the minimum income liable to assessment having been raised in 1903 from £33. The total number of persons assessed is only about 260,000. In 1907-1908 the gross receipts from income tax amounted to £1,504,000.
Other sources of revenue are stamps, levied on judicial proceedings and commercial documents; registration of mortgages and other instruments; and provincial rates, chiefly in Bengal and the United Provinces for public works or rural police. The rates levied at a certain percentage of the land revenue for local purposes are now excluded from the finance accounts. In 1907-1908 the gross receipts amounted to: from stamps, £4,259,000, of which more than two-thirds was derived from the sale of court fee stamps; from registration, £415,000; and from provincial rates, £526,000.
Commerce and Industries.
India may almost be said to be a country of a single industry, that industry being agriculture. According to the census of 1901 two-thirds of the total population were employed in occupations connected with the land, while not one-tenth of that proportion were supported by any other single industry. The prosperity of agriculture therefore is of overwhelming importance to the people of India, and all other industries are only subsidiary to this main occupation. This excessive dependence upon a single industry, which is in its turn dependent upon the accident of the seasons, upon a favourable or unfavourable monsoon, has been held to be one of the main causes of the frequent famines which ravage India.
Agriculture.—The cultivation of the soil is the occupation of the Indian people in a sense which is difficult to realize in England, and which cannot be adequately expressed by figures. As the land tax forms the mainstay of the imperial revenue, so the ryot or cultivator constitutes the unit of the social system. The organized village community contains many other members besides the cultivators; but they all exist for his benefit, and all alike are directly maintained from the produce of the village fields. Even in considerable towns, the traders and handicraftsmen almost always possess plots of land of their own, on which they raise sufficient grain to supply their families with food. The operations of rural life are familiar to every class. They are enveloped in a cloud of religious sanctions, and serve to mark out by their recurring periods the annual round of common life.
But though agriculture thus forms the staple industry of the country, its practice is pursued in different provinces with infinite variety of detail. Everywhere the same perpetual assiduity is found, but the inherited experience of generations has taught the cultivators to adapt their simple methods to differing circumstances. For irrigation, native patience and ingenuity have devised means which compare not unfavourably with the colossal projects of government. Manure is copiously applied to the more valuable crops whenever manure is available, its use being limited by poverty and not by ignorance. The rotation of crops is not adopted as a principle of cultivation; but in practice it is well known that a succession of exhausting crops cannot be taken in consecutive seasons from the same field, and the advantage of fallows is widely recognized. The periodicity of the seasons usually allows two, and sometimes three, harvests in the year, but not necessarily, nor indeed usually, from the same fields. For inexhaustible fertility, and for retentiveness of moisture in a dry year, no soil in the world can surpass the “black cotton-soil” of the Deccan. In the broad river basins the inundations deposit annually a fresh top-dressing of silt, thus superseding the necessity of manures.
Wheat.—Within recent years wheat has become one of the most important crops in India, more especially for export. The canal colonies of the Punjab have turned northern India into one of the great grain-fields of the British empire; and in 1904 India took the first place in supplying wheat to the United Kingdom, sending nearly 25½ million cwts. out of a total of 97¾ millions. In 1905, however, it fell back again into the third place, being passed by Russia and Argentina. Wheat is grown chiefly in the Punjab, the United Provinces, and the Central Provinces. In 1905-1906 there were 23 million acres under wheat in the whole of India, of which 8½ million were in the Punjab alone.
Rice.—The name of rice has from time immemorial been so closely associated with Indian agriculture that it is difficult to realize how comparatively small an area is planted with this crop. With the exception of the deltas of the great rivers and the long strip of land fringing the western coast, rice may be called an occasional crop throughout the remainder of the peninsula. But where it is grown it is grown to the exclusion of all other crops. The rice crop is most important in Burma, Bengal and Madras, and there is an average of 20 million acres under rice in the other provinces of British India. In Bengal the area varies from 36 to 40 million acres according to the season. In Burma, where the large waste area is being gradually brought under cultivation, there has been an almost uninterrupted increase in the area of the rice crop, and the rice export is one of the main industries of the province. In ordinary years most of this rice goes either to Europe or to the Farther East; but in famine seasons a large part is diverted to peninsular India, and Burma is the most important of the outside sources from which the deficient crops are supplemented. In 1905-1906 the export of rice from India was valued at 12½ millions sterling.