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whichever may be higher; and secondly, there would be no guarantee from 1960-61 onwards.
This recommendation has been accepted by the four States concerned, with one important qualification in the case of Travancore-Cochin. That State will receive in the first three years (1950-51 to 1952-53) a further guaranteed sum equal to the amount by which its actual federal revenues of the year ending 16th August 1949 exceeded the average of such revenues during the two years ending 16th August 1949. This concession was necessitated by the need to give some compensating advantage as against the heavy loss resulting from the immediate total abolition of all internal customs duties.
Miscellaneous Matters
197. The Committee's recommendations covered also a range of miscellaneous matters of which the most important are set out below.
(1) Income-tax.—Apart from the question of the rates of income-tax in merged States and in federating States and Unions, the Committee has made various recommendations of a technical character[1] which are under separate examination. Action concerning those which relate to merged States has been completed; and those relating to the federating States and Unions will soon be taken up.
(2) Staff in "Federal" Departments.—In paragraph 11 (1) of Part II of its Report, the Committee recommended that—
"(1) The permanent staff wholly (or substantially) engaged on work connected with "federal" subjects in States on the prescribed date should be taken over by the Centre in appropriate grades and upon terms not less advantageous than in the service of the States. Temporary staff so engaged should also be similarly absorbed so far as possible, having due regard to their suitability. The States attach considerable importance to this point, and would be glad to release all such staff consistent, of course, with their own requirements in those departments (such as Excise)
- ↑ Annexure to Part I of the Committee's Report.
