Privy Purses -I
“Promise me, no promises”- (‘No Promises’) Taylor Swift
The idea of Privy purses would absolutely be an anachronistic relic of the past in modern, democratic India. This chapter of Indian history receives almost no attention in popular public discourse. Whenever the matter does receive acknowledgment from popular academia, the issue is mischaracterised as a story of how the brave Prime Minister Mrs. Gandhi, in order to create an egalitarian society amended the Constitution to ensure that descendants of former princes do not receive ‘pocket money’ from the taxes collected from ordinary citizens. A reading of a sentence loaded as such does leave a very stark impression on the reader. Why must tax money collected from us, the taxpaying citizen go to perhaps the most entitled and privileged people in the country just because they won the birth lottery? In fact, this seems morbidly arbitrary and an almost revolting thought. Why should the taxpayer’s money be ‘wasted’ on people literally living in the ivory tower instead of building better services for the citizen? Even when the flaws of Mrs. Gandhi’s long years in power are discussed, this issue is generally overshadowed. This is only because there were so many flaws that cast multiple long dark and often overlapping shadows, this atrocity-affecting a very small number of people fails to find the level of condemnation it deserves. This piece means to add context to this forgotten issue of the Privy Purses and highlight how this identified line of thinking is myopic and simply inherently immoral. It was in fact, a betrayal on the part of the Union of India, and in depriving the descendants of princes an amount of money, the honour of India was permanently damaged by those chosen to represent it.
A historical background
The then Governor-General Lord Dalhousie’s policy of annexation resulted in large parts of India becoming territories of the British East India Company. The company appointed a ‘Resident’ in each of the conquered states that accepted a “subsidiary alliance”. The terms of this agreement generally were that the Indian king had to accept British forces within his territory and to pay for their maintenance, recognise a British population and that he could not declare war without the permission of the British- this effectively curtailed all sovereign powers of the Indian monarchs. Lord Dalhousie also promulgated the ‘Doctrine of Lapse’- a policy that effectively meant that princely kingdoms would dissolve and lapse into British India is the ruler was either ‘manifestly incompetent (in the eyes of the British) or died without a biological male heir. The latter was used to annex the kingdoms of Nagpur, Jhansi, Bhagat and a few others. This, however, resulted in large-scale corruption and uprising. During the Sepoy Mutiny of 1857, most of the Indian rulers in fact, supported the British in crushing the uprising. In fact, Lord Canning’s reference to the princely states as ‘breakwaters in the storm which would have swept over us in one great wave’ is perhaps an understatement. The policy of annexation by the Company was soon replaced by extravagant promises made to the princes that their dignity, honour and position would be preserved. Adoption practices were thus reinstated according to religious customs subject to approval by the British. The British formally proclaimed the same in 1858 saying that they do not desire any territorial expansion of their direct rule and they will respect the right of self-governance of the rulers and subjects of the princely states.
Legally, the people within the states were not British citizens and theoretically, the Princes were sovereign rulers of their own states. In practice however, they were all subject to the British government. VP Menon, deputy to none other than Sardar Patel noted in his book that an analysis of hundreds of cases that show the power that the British crown (in fact, the British Parliament which had by then, replaced the Company in India) wielded over the states, it would be dishonest to suggest that the princes had any real power over their territories. To pick an example, the ruler did not receive his seat as a matter of right, he effectively received it as a gift from the paramount power (the British Crown). It was the Crown that had the power to regulate the status and salutes of the Princes and confer upon them titles or decorations- which had the effect of binding the princely states directly under the Crown.
In 1947, the Princely states covered 48% of India’s territory and contained 28% of its population. The Indian Independence Act of 1947 (A British legislation) vested upon the rulers, the power to accede to the then Dominions of India or Pakistan or continue as an independent state. Just to be clear, if the Princely states had not joined the dominion of India, the country would have consisted of the major presidencies of Madras, Calcutta and Bombay and Chief Commissioners Provinces as independent India on one hand and the Princely States on the other. Free India thus would not have had any power over these kingdoms as mini-states at all. Sardar Patel, understanding that this would inevitably cause great turmoil and confusion in a partition wounded India dealing with famines and large-scale communal violence sought to amicably negotiate a settlement with the princes by which they accede to India.
The settlement
At a meeting of Lord Mountbatten with the leaders of the Indian National Congress and the Muslim League, a new ‘Princely States department’ was set up with one minister from the Congress and one from the League. Pandit Nehru nominated none other than Sardar Patel to persuade the rulers to join the Indian union. This process resulted in the creation of a geographically united India. The princes signed common covenants with the union to form themselves into the united states, Instruments of Accession and Instruments of Mergers. 552 of 555 former princely states (exceptions being Mysore, Hyderabad and Jammu and Kashmir) thus formed great parts of the Union of India by signing one of these documents. The last governor-general of India, Rajaji (C. Rajagopalachari) signed these documents. Honourable people like Pandit Nehru and Sardar Patel reiterated their promises to the princes that their autonomous existence would be scrupulously respected by the Central Government. The guarantee of non-encroachment primarily persuaded the princes to agree on integration which meant that most of their assets needed to be surrendered and their princely states would be dissolved. The promise of privy purses was made to the rulers in return for handing over their states to the then dominion of India forever.
What were the Privy Purses?
The privy purses were fixed on the basis of a formula where a ruler whose state generated annual revenue of Rs. 15 lakhs would be entitled to receive 8.5% of that revenue per year. Out of 554 states, 450 had revenue less than Rs. 15 lakhs. For 11 larger states, this amount was fixed on an ad hoc basis and they varied depending on the state. The 396 other smaller rulers drew anywhere from Rs. 192 per year (Katodia) to Rs. 50,000. The rulers were to maintain their family and other staff with this amount. Additionally, the heirs to these people would only get an amount that the Government of India would decide. The total cost of creating a unified and integrated country on the taxpayer was Rs. 6 crores on 1947 which gradually reduced to Rs. 4 crores in 1970. Not a single objection was raised to these amounts by any former ruler as a display of their accommodative nature to the newly formed union.
Anyone with any knowledge of how inflation works would know that this amount would, in real terms be reduced to a mere pittance in due course of time and would only be a tokenistic gesture only unless the amount payable were to be increased by a future government which would simply not happen as this would neither be favourable for the government to do politically nor would they want to give more tax money that they could otherwise be put to use. Any inflation adjustment demand by a prince could simply be shot down and the amount payable in 1947 could be continued to be paid.
In return, the rulers had to surrender many villages, thousands of acres of jagir land, palaces, buildings, aeroplanes, cash and investment balances worth Rs. 77 crores. In addition to this, 12,000 miles of railway systems within the states were given to the centre without any compensation. Sardar Patel in fact, in 1949 informed the Constituent Assembly that if the money surrendered by the rulers of now Madhya Pradesh were invested properly, it would cover the money to be given to all former rulers. The payments that were to be made to the princes was one fourth of what they earlier enjoyed.
Privy purses in the Constitution
Sardar Patel in a speech made to the Constituent Assembly on the 12th of October 1949 remarked that the privy purses settlement was basically money paid to the former rulers to surrender their powers to the Government of India and for the dissolution of their states into small units. He also remarked that this is a small price that the Government must bear as a cost for a bloodless revolution which if it had been forcefully done would have affected millions and the fragile unity of the new Republic of India. The princes had according to Patel, lived up to their end of the bargain by transferring power to the Government. A failure on part of the Government to do the same would be a dishonourable breach of faith.
The recognition of these mergers was given the highest guarantee that can be given by a nation-state- A constitutional guarantee. Articles 291 and 362 as produced below contained this guarantee.
Art. 291. Where under any covenant or agreement entered into by the Ruler of any Indian State before the commencement of this Constitution the payment of any sums, free of tax, has been guaranteed or assured b; the Government of the Dominion of India to any Ruler of such State as privy purse-
(a) such sums shall be charged on, and paid out of, the Consolidated Fund of India; and
(b) the sums so paid to any Ruler shall be exempt from all taxes on income.
Art. 362. In the exercise of the power of Parliament or of the Legislature of a State to make laws, or in the exercise of the executive power of the Union or of a State, due regard shall be had to the guarantee or assurance given under any such covenant or agreement as is referred to in article 291 with respect to the personal rights, privileges and dignities of the Ruler of an Indian State.
The sanctity of this Constitutional promise was maintained unequivocally by both Pandit Nehru and Lal Bahadur Shastri repeatedly despite staunch opposition from within and outside the Congress Party including a show of disapproval by official resolutions. Doing away with privy purses unilaterally by the government would be something that would damage the honour of India and the faith that the people could put on the government. Paying a sum of money as an entitlement to a select group of privileged people was by no means a popular move to the poverty-stricken masses of Indian people. However, the honour of a promise must be kept and it must once again be made clear that this was not a gift by the government to a few citizens, this was money paid as compensation to their voluntary surrender of all political power, valuable personal and sovereign property to the union government.
This scheme of things, however, was about to change soon after Prime Minister Shastri’s death.
Note- This piece is only meant to set the tone for the subsequent piece on the same issue covering Mrs. Gandhi’s moves in the Parliament, the Supreme Court case and the Amendment.
