BPSC 69th CCE Prelims General Studies · Question 76 of 144

Correct — A, Only 1 and 2. Lord Mayo — Richard Southwell Bourke, 6th Earl of Mayo, Viceroy 1869–1872 — issued the Resolution on provincial finance in December 1870, and it took effect with the financial year that began on 1 April 1871. Statement 1 holds. Until then Indian finance was a single imperial purse: all revenue belonged to the Government of India, every head of provincial expenditure was sanctioned from the centre, and provincial administrations bargained for allotments rather than managing budgets of their own. Mayo's Resolution cut that purse in two for the first time, which is exactly what 'the first step that bifurcated Central and Provincial finances' says. Statement 2 holds. The Resolution gave each provincial government a fixed annual assignment out of imperial revenue together with responsibility for running a defined group of departments — police, jails, education, medical services, roads, printing and civil buildings — and allowed provinces to raise additional local revenue for them. 'Empowered to administer certain services' is a fair description of precisely that transfer. Statements 3 and 4 fail, and they fail together for one structural reason: the size of each province's assignment was calculated from what that province was already spending on those departments. A grant pegged to existing expenditure cannot rectify existing disparity — by construction it freezes whatever pattern it inherits — and it measures not what a province needs but what it happened to have been receiving. That objection was understood at the time, and it is exactly what Lord Ripon's Resolution of 1882 was designed to answer: Ripon replaced the fixed grant with a province's share in the receipts of certain 'divided heads' of revenue, settled quinquennially, so that provincial income moved with a province's own revenue base instead of with a frozen 1871 baseline. The shape of the option set confirms the split. Statements 1 and 2 are not seriously in dispute, which kills (b) and (c) at once. And nothing on offer lets you accept one of 3 and 4 while rejecting the other — they stand or fall together — so the question reduces to (a) against (d), and the fixed-expenditure basis sinks both.

• (b)Only 1, 3 and 4 — The mirror image of the right answer: it drops statement 2, which is the least contestable item on the list, and keeps the two evaluative claims that the Resolution's own arithmetic contradicts. The transfer of police, jails, education, medical services, roads, printing and civil buildings to provincial administration is the substance of the 1870 Resolution — take it out and there is nothing left of the reform but an accounting change.
• (c)Only 2, 3 and 4 — Drops statement 1, the bifurcation itself. A candidate reaches for this if he associates the real separation of central and provincial finance with Ripon's 1882 Resolution, or with the Devolution Rules of 1919 — both genuinely important, but both later refinements of a line that starts in 1870. Ripon changed the basis of the provincial share; Mayo is the one who first made a provincial share exist.
• (d)1, 2, 3 and 4 — The all-of-the-above reflex, and here it is genuinely tempting, because statements 3 and 4 describe what a thoughtful reformer would obviously want — fairness between provinces and allocation by need. Mayo may well have wanted both. The Resolution did neither, because it fixed each province's grant on that province's existing spending, which is the one method guaranteed to reproduce the inequality already in the system.

Indian public finance under the Company and the early Crown was centralised to a fault. The Charter Act of 1833 concentrated financial and legislative authority in the Governor-General in Council; after 1857 the deficits and James Wilson's emergency budget of 1860 tightened that grip further. The result was a well-known perverse incentive: because provincial spending came out of a common imperial pool, every province had a motive to demand more and none to economise, while the centre spent its energy adjudicating claims it could not evaluate. Mayo's Resolution of 1870 was an incentive fix rather than a constitutional one — hand each province a fixed sum for a named list of services and let it keep what it saves and bear what it overspends. From there the line of reform runs continuously: Lytton's 1877 scheme assigned provinces the receipts of certain revenue heads; Ripon's 1882 Resolution replaced fixed grants with shares in 'divided heads'; Curzon moved to quasi-permanent settlements in 1904; the Devolution Rules under the Government of India Act 1919 separated central and provincial heads of revenue outright; the Act of 1935 gave three legislative lists; and the Constitution's Articles 268 to 281 and the Finance Commission under Article 280 are the modern form of the same problem.

Work the statements in two blocks rather than four. Block one is 1 and 2 — both are descriptions of what the document did, both are standard, and accepting them eliminates (b) and (c). Block two is 3 and 4 — both are evaluative claims about the Resolution's design intent and effect, and crucially the option set never separates them, so you only have to decide whether the pair is true or false. The single discriminating fact is the basis of the grant: it was calculated on each province's existing expenditure. Hold that one fact and the pair collapses, because a grant fixed on the status quo can neither correct disparity nor track need. That, and not any general scepticism about colonial motives, is the reasoning the answer rests on. A note on confidence, since this answer is ours and not a Commission's. We mark it medium rather than high for one honest reason: statements 3 and 4 are evaluative, and 'attempted' in statement 3 invites a charitable reading. Mayo did want a fairer and more rational settlement, and he wanted more than he got — Curzon, speaking in the House of Commons in 1892 on the Indian Councils Bill, called him 'that wise and enlightened Viceroy' and recorded that Mayo had first proposed laying provincial budgets before provincial councils twenty years earlier, only to be 'over-ruled by the Government at home'. Read statement 3 as intent and it is arguable. Read it as what the Resolution actually did — which is how a prelims statement about a named document is normally read, and how the standard critique of the 1870 scheme reads it — and it fails. We follow the second reading.

• Lord Mayo (Richard Southwell Bourke, 6th Earl of Mayo) was Viceroy 1869–1872; the Resolution on provincial finance was issued in December 1870 and operated from the financial year beginning 1 April 1871
• Departments transferred to provincial administration: police, jails, education, medical services, roads, printing and civil buildings — met from a fixed annual assignment out of imperial revenue, with provinces free to raise additional local revenue
• The assignment for each province was computed from that province's existing level of expenditure on those services, which is the ground on which the scheme is criticised for entrenching rather than correcting inter-provincial disparity
• The reform line: Mayo 1870 (fixed grants) → Lytton 1877 (provinces also assigned the receipts of certain revenue heads) → Ripon 1882 (share of 'divided heads', settled quinquennially) → Curzon 1904 (quasi-permanent settlements) → Devolution Rules under the Government of India Act 1919
• Curzon in the House of Commons, 1892, on the Indian Councils Bill: 'It is now twenty years since Lord Mayo, that wise and enlightened Viceroy, first proposed the submission of Provincial Budgets to the Provincial Councils. At that time he was over-ruled by the Government at home.' (A. B. Keith, Speeches and Documents on Indian Policy 1750–1921, Vol. II)
• Mayo's viceroyalty also created the Department of Agriculture, Revenue and Commerce in 1871 and ordered the census operations of 1872, the first attempt at an India-wide enumeration (the first synchronous census followed in 1881); he was assassinated at Port Blair in the Andamans in February 1872, the only Viceroy killed in office

• Crediting the first bifurcation of central and provincial finance to Ripon (1882) or to the Devolution Rules (1919) — those refined a line that Mayo opened in 1870
• Assuming that any decentralisation measure must have been equity-driven; Mayo's grants were pegged to existing expenditure, which is the opposite of equalising
• The all-of-the-above reflex on a four-statement stem — check whether the codes ever let you split the two soft statements before you agonise over either

BPSC asks colonial administrative history as multi-statement verification with a codes list, and — as here — mixes hard descriptive statements with evaluative ones you must judge rather than recall; the discriminator is usually one mechanism, not four facts. UPSC hardly ever names the 1870 Resolution; it asks the constitutional endpoints instead — what dyarchy meant, which subjects were 'reserved' in 1919, which Act supplied the Seventh Schedule's three-list scheme. Learn the mechanism for BPSC and the destination for UPSC.

• practice — not a real PYQ

  Whose Resolution replaced the fixed provincial assignments of 1870 with a share in the receipts of certain 'divided heads' of revenue?

  • (a)Lord Lytton
  • (b)Lord Ripon
  • (c)Lord Curzon
  • (d)Lord Mayo

  Answer(b) Lord Ripon — his Resolution of 1882 moved provinces from a fixed grant to a share of divided heads settled quinquennially, so provincial income finally tracked provincial revenue.

• practice — not a real PYQ

  Which of the following was NOT among the services transferred to provincial administration by Lord Mayo's Resolution of 1870?

  • (a)Police
  • (b)Jails
  • (c)Defence
  • (d)Education

  Answer(c) Defence — the transferred list covered police, jails, education, medical services, roads, printing and civil buildings; defence, along with railways, posts and currency, stayed wholly imperial.