Ansh Chowdhari
“Money is a terrible master but an excellent servant”
All over the world, the expanse of administration and its various facets have invariably enhanced and complicated the financial system to a great extent, and to this end, the role of accounts department too has also gone a sea change. Jammu and Kashmir too hasn’t remained untouched by these developments. Right from the early days of Dogra rule, when a unified single line administration was put in place, the accounts and finances of the state has seen a remarkable evolution. However, in this essay, my primary aim is just to look for this department’s history as a marker of the state’s changing needs of developmental finances during those initial years.
Despite undertaking reforms like the abolition of the Moulut, by which the accounts were continued to the 14th month and abolishing taxes like Chuttinia, the Daftar-i-Diwani which came into existence during the reign of Gulab Singh was in utterly confused order and most of the employees working there were corrupt and inefficient.
SDS Charak in his book states that “A comprehensive system of receipts and payments seems to have been devised and all such transactions were recorded and all entries were required to be periodically audited and cash balances or physically verified. Thus, an accounting system existed in the state during Ranbir Singh’s reign and was known as Daftar-e-Diwani but the system was incomplete insufficient and imperfect.
He has further noted that these Persian-language accounts, which were written on loose sheets of paper, were often treated as unimportant. These accounts were received irregularly by the Wazir-I-Wazarat from Tehsildars and other officials. However, like other officers, the Wazir-I-Wazarat also sent these accounts irregularly, usually once a month, to the Daftar-I-Diwani through the Wazir-I-Ala or governor.
The accounts prepared by various departments were unreliable. Serious mistakes were not uncommon, and as a result, the state’s Accounts department could never produce an accurate balance sheet for any given year. Even if a balance sheet was prepared, its contents were often fictional or impossible to collect. The Accounts Department did not involve itself in transactions nor did it formally report on them. Its function was simply to record the trustworthy actions of other departments. Parry Nisbet, the then Resident in Kashmir, writing in 1889 notes the misappropriation of funds in the name of army salaries. He states that the upper echelons of the administration were involved in mishandling of these fund for their personal expenditure. Even if the state had a budget system in place before 1892, it was still too flawed and imperfect. The budget was being constructed under several headings by various departments, using some made up numbers without giving the statistical means the proper consideration. The state’s usage of numerous currencies, including Nanak Shahi, Hari Singhi, Chilki etc., further exacerbated the issue.
However, with the constitution of the Council in 1889 which divested the power and control in financial matters from the Maharaja to the British Resident in Kashmir, a renewed vigour to streamline the accounting system of the state captured the minds of the rulers. The Resident, being the representative of the Government of India, became the final authority regarding the internal matters concerning finance. He took over as the state’s primary financial controller after the Council in J&K gained authority in 1889. At the same time, the members of the State Council also enjoyed considerable powers in the financial matters.
In order to revamp this degraded system, a committee headed by the then-Bombay accountant general was established by the State Council in this regard under the chairmanship of R Logan, the then Accountant General of the Bombay state. Logan was invited by the government to conduct a thorough investigation into the state’s finances. Additionally, he was tasked with setting the Accounts Department up for success. In the final report that he submitted to the government in November 1891, he, inter alia, made the following recommendations:
1. Proposal for the formation of an Accounts office
2. Better regulation of government treasuries
3. Series of new rules for the withdrawal of money from the state treasuries in account of any public work
4. Better management of Dharmarth funds.
As a consequent action therefore, the department of Accounts and Audits was established in the state in 1892. In this regard, the office of Accountant General became indispensable to the effective discharge of accounting functions. The Accountant General, in order to conduct the work of auditing off different departments, was assisted by several auditors. He was the final audit authority in all doubtful and disputed cases. Thus, after 1892, a systematic system of auditing was put in place to check and manage the government finances. The Accountant General who also acted as Auditor General, was the most important officer in the Finance Department
The main reason for the creation of an office of AG was to help improve the financial administration and to have control over the system of accounting, auditing, and budget formulation. The Accountant General was charged with developing and establishing a system of accounting and auditing guidelines as well as with accurately completing the Finance Department’s monthly and annual accounts. All Department Heads were required to submit their departmental budget projections after they had been created.
Logan has also stressed the importance of adequately managing the State treasuries. The State Council was aware from the start that ineffective management of the State treasuries would prevent the State’s financial system from being reformed. As a result, the State’s treasuries became stronger, and numerous procedures were put in place for better management of them.
Both the capital cities of Jammu and Srinagar had Saddar Treasuries and a Reserve Treasury. Additionally, there were treasuries in each Tehsil and Niabat of the State. The Frontier regions also had a few State chests. The Reserve Treasury’s primary duties included overseeing the general management of other treasuries as well as the preservation and management of the State treasure. In actuality, the State had two Reserve Treasuries at the start of the Maharaja Pratap Singh’s reign: one in Jammu and one in Riasi. The Sadar Treasury was under the charge of Treasury Officer. Tehsil Treasury was under the immediate and executive control of the Tehsildar, while Naib-Tehsildar held the immediate and executive control of the Niabat Treasury. These treasuries were the mainstay of government finances that held various categories of valued possessions, including the personal property of the ruler. These treasuries also served as the disbursing centres which overtime developed niche functions under future reforms.
Overall, it can be said that this was the general system of state’s accounting and financial management at the cusp of the 20th century. With time, the system got interlaced with many new and modern changes that made this department acutely involved with the public administration to an extent that its healthiness was considered as a barometer to judging the government’s effective policy implementation on the ground.
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