ABSTRACT
In the preceding chapters nothing has been said about the financial constitutions of the local bodies. It is not usual to include the finances of the local bodies in the books dealing with the financial machinery of the State. It is, however, desirable to know their financial position and their relation to the financial organization of the country as a whole. It is not possible to give a connected account of the financial constitution of the local bodies. The variety of their form, the different stages of the political development through which they are passing, the increasing importance of the local conditions and circumstances in determining their constitution as a result of the local self-government having been made a transferred subject under the Reforms and the peculiar features of the problems of local finance make it difficult to describe their financial constitution in general terms. The description in the following paragraphs is necessarily fragmentary and brief. It is not necessary to dwell on the importance of the local bodies. It is generally admitted that as they are the training-ground of democracy, it is essential to vitalize them for the healthy working of the whole political system. The problem of local finance has been, all the world over, difficult to tackle on account of the necessity of reconciling what appear to be mutually repulsive ends. On one hand it is necessary to secure what has been called the “national minimum” of efficiency in local administration. The institutions, apart from their educative value, are of more than local importance. Their activities, or at least some of them have national importance, and it is, on that account, desirable to realize a certain standard of efficiency in their performance. But if that leads to undue centralization and circumscribes the sphere of their spontaneous activity, they become the agency of the central authority and cease to be the organs of local self-government.
