Financial Condition of India in 1858
The revolt and suppression of the revolt increased the debt of the country by 40 million sterling. The changes in the military after the Government of India Act also required an additional annual expenditure of 10 million sterling.
Grappling with this deficit was not an easy task. For this purpose, a distinguished political economist and parliamentary financier, James Wilson, was sent from England as financial member of the Council of India.
- James Wilson was the founder of the much popular “The Economist“
(weekly news and international affairs publication).
- James Wilson was also the founder of modern Standard Chartered Bank.
James Wilson was sent to India to establish the tax structure, a new paper currency and remodel the finance system of India after mutiny. This workaholic personality refused to leave the stifling climate of Calcutta during summers, got some infection and died in office within one year of the job. But still his contribution was great in the initial financial set up of the India.
- James Wilson is one of the earliest forefathers of India’s Income Tax Structure.
The following steps were taken by James Wilson to bring the economy on track:
- The custom system was reorganized and all export duties were abolished.
- The import duties were lowered.
- A 5% Income tax was imposed on all incomes more than 200 Rupees
- License duty of 1, 4 and 10% were imposed on the trades and professions.
- Tobacco was placed under an internal revenue tax.
- The business methods of the government, especially in the military department were revised.
- A Paper currency commission was set at Calcutta, which was corresponding with the “Department of Issue of the Bank of England“. The branches of this commission were established at Bombay and Madras.
- The Paper Currency Commission was authorized to issue notes ranging in value from Rupees 5 till Rupees 1000, which were redeemable in Silver.
But, this outstanding “first” finance minister of India died amid of the splendid task. He was succeeded by another finance member of council named Samuel Laing, who endeavored to free the poorest classes from the burden of taxation. He unsuccessfully tried to get the Bengal Tenancy Bill passed. The Bill was passed only after 2 decades as Bengal Tenancy Act 1885.