History of the salt tax in British India
Taxation of salt has occurred in India since the earliest times.[ of the British East India Company. When the Crown took over the administration of India from the Company in 1858, the taxes were not replaced.
The stringent salt taxes imposed by the British were vehemently condemned by the Indian public. In 1885, at the first session of the
After the arrest of Gandhi, Sarojini Naidu led the satyagrahis to Dharasana Salt works in Gujarat and was arrested by the police officers. C. Rajagopalachari broke the Salt Laws at Vedaranyam, in Madras Province in the same year. Thousands courted arrest and were imprisoned in large numbers. The administration eventually relented and invited Mahatma Gandhi to England to attend the Second Round Table Conference. Gandhi's Dandi March got wide news coverage and proved to be a turning point in the history of India's independence movement.
The salt tax, however, continued to remain in effect and was repealed only when Jawaharlal Nehru became the prime minister of the interim government in 1946. After independence, a salt tax was later re-introduced in India via the Salt Cess Act, 1953 before being scrapped and succeeded by the Goods and Services Tax in 2017, which does not tax salt. In Pakistan, table salt is currently taxed but iodised salt is not.
Taxation of salt
An early mention of salt taxation is found in Guanzi, a book written in China c. 300 BCE, which proposes various methods for its implementation.[2] The recommendations of Guanzi became the official salt policy of early Chinese Emperors. At one point, salt taxes constituted over one-half[citation needed] of China's revenues and contributed to the construction of the Great Wall of China.
Salt was also important in the ancient
In Britain, there are references to salt taxes in the
Taxation of salt in India
Salt-producing areas in India
Salt has been produced all along the Rann of Kutch on the west coast of India for the past 5,000 years.[2] The Rann of Kutch is an extensive marshland that is cut off from the rest of the Indian subcontinent during monsoons when the seas inundate the low-lying areas. However, when the seawater evaporates during summer, it leaves behind a crust of salt which accumulates as salt pans.[2] This salt is collected by laborers called malangas.[2]
On the east coast, salt could be obtained extensively along the coast of
Taxation of salt before British rule
Salt is a commodity that had been taxed in India ever since the time of the
In Bengal, there was a salt tax in force during the era of the
Taxation of salt by the British East India Company
In 1759, two years after its victory at the
In 1764, following the victory at the
The outrage was expressed by the authorities in England who declared:
We consider it too disgraceful, and below the dignity of the present situation, to allow such a monopoly.
Clive responded by offering the company 1,200,000 per annum from the profits made.
However, the authorities in England were stubborn, and due to the pressure they exerted, the monopoly of tobacco and betel nut was stopped on 1 September 1767, followed by the annulment of the salt monopoly on 7 October 1768.
In 1772, the governor-general, Warren Hastings, brought the salt trade once again under the company's control. The salt works were leased out to farmers who agreed to deliver salt at a fixed rate to the company and sold the leases to the highest bidders. Corruption dealt a severe blow to the company and the revenue from salt trade fell to 80,000 rupees by 1780. This, along with the exploitation of the malangas or salt workers by their landlords, forced Hastings to introduce a new system for controlling the salt trade in India.
In 1780 Hastings brought the salt trade once again under government control, dividing the infrastructure into agencies, each under the control of an agent and governed by a controller. This system persisted, with minor modifications, until India's independence in 1947. Under this new system, the malangas sold the salt to the agents at a particular price, initially fixed at 2 rupees a maund with a tax of 1.1 to 1.5 rupees a maund. This new system was a success, and in 1781–82, the salt revenue was 2,960,130 rupees. The company received salt revenue of 6,257,750 rupees in 1784–85.
From 1788 onwards, the company began selling salt
In 1804, the British monopolized salt in the newly conquered state of Orissa. In return, they advanced money to the malangas against future salt production, resulting in the malangas becoming debtors to the British, virtually becoming economic slaves. The Orissa
In the early 19th century, to make the salt tax more profitable and reduce smuggling, the East India Company established customs checkpoints throughout Bengal. G. H. Smith established a "customs line", which was the boundary across which salt transportation involved payment of high customs duties. In the 1840s a
A customs line was established, which stretched across the whole of India, which in 1869 extended from the Indus to the Mahanadi in Madras, a distance of 2,300 miles; and it was guarded by nearly 12,000 men and petty officers... it consisted principally of an immense impenetrable hedge of thorny trees and bushes, supplemented by stone wall and ditches, across which no human being or beast of burden or vehicle could pass without being subject to detention or search.
— (Strachey and Strachey 1882, 219–220)
Taxation of salt by the British authorities
The taxation laws introduced by the British East India Company were in vogue during the ninety years of
In 1900 and 1905, India was one of the largest producers of salt in the world, with a yield of 1,021,426 metric tons and 1,212,600 metric tonnes respectively.
In 1923, under the viceroyalty of Lord Reading, a bill was passed doubling the salt tax. However, another proposal made in 1927 was subsequently vetoed. It was one of Finance Member Basil Blackett's first deeds when producing his first budget in February 1923.
Year | Rs (million) | £ (million) |
---|---|---|
1929–30 | 67 | 5.025 |
1930–31 | 68 | 5.1 |
1931–32 | 87 | 6.525 |
1932–33 | 102 | 7.65 |
Salt laws
The first laws to regulate the salt tax were made by the British East India Company.
In 1835, the government appointed a salt commission to review the existing salt tax. It recommended that Indian salt should be taxed to enable the sale of imported English salt. Consequently, salt was imported from
In 1878, a uniform salt tax policy was adopted for the whole of India, both British India as well as the princely states. Both production, as well as possession of salt, were made unlawful by this policy. The salt tax, which was one rupee and thirteen annas per maund in
Section 39 of the Bombay Salt Act, which was the same as Section 16-17 of the Indian Salt Act, empowered a salt-revenue official to break into places where salt was being illegally manufactured and seize the illegal salt being manufactured. Section 50 of the Bombay Salt Act prohibited the shipping of salt overseas.
The India Salt Act of 1882 included regulations enforcing a government monopoly on the collection and manufacture of salt. Salt could be manufactured and handled only at official government salt depots, with a tax of Rs 1-4-0 on each maund (82 pounds).
In 1944 the Central Legislative Assembly passed the Excises and Salt Act (Act No. I of 1944), which, though modified in India and Pakistan, remain in force in Bangladesh.
A new salt tax was introduced to the Republic of India, via the Salt Cess, 1953, which received the assent of the president on 26 December 1953, and was brought into force on 2 January 1954:[9]
Then again there is a still more wretched creature, who bears the name of a laborer, whose income may be fixed at thirty-five rupees per annum. If he, with his wife and three children, consumes twenty-four seers [49 lb] of salt, he must pay a salt duty of two rupees and seven annas, or in other words 7½ percent income tax. Now we leave it to our readers to judge, whether the ryots and the laborers can procure salt in the quantities they require. We can positively state from our own experience, that an ordinary ryot can never procure more than two-thirds of what he requires, and that a laborer not more than half.[10]
Early protests against the British salt tax
Since the introduction of the first taxes on salt by the British East India Company, the laws were subjected to fervent criticism. The Chamber of Commerce in Bristol was one of the first to submit a petition opposing the salt tax:
The price to the consumer here [in England] is but about 30s per ton instead of 20 pounds per ton as in India; and if it was necessary to abolish the Salt tax at home some years since it appears to your petitioners that the millions of her Majesty's subjects of India have a much stronger claim for remission in their case, wretchedly poor as they are, and essentially necessary as salt is to their daily sustenance, and to the prevention of disease in such a climate.[11]
The salt tax was criticized at a public meeting at Cuttack in February 1888. In the first session of the Indian National Congress held in 1885 in Bombay, a prominent Congress member, S. A. Saminatha Iyer pleaded against the tax:[12][13][14]
It would be unjust and unrighteous if the tax on salt should be increased. It is a necessary article both for human as well as animal well-being... it would be bad policy and a retrograde movement to raise the tax, especially at a time when the poor millions of India are anxiously looking forward to a further reduction of the tax... As any increase, therefore, of this tax will fall heavily upon the masses of the people of the land, I would strongly urge upon the attention of this Congress the necessity of its entering its strong protest against any attempt on the part of Government to raise the tax on salt.[1]
At the
The salt tax was also protested by eminent people like Dadabhai Naoroji. On 14 August 1894, he thundered in the House of Commons:
Then the Salt Tax, the cruelest Revenue imposed in any civilized country provided Rs. 8,600,000/- and that with the opium 'formed the bulk of the revenue of India, which was drawn from the wretchedness of the people... It mattered not what the State received was called – tax, rent, revenue, or by any other name they liked – the simple fact of the matter was, that out of a certain annual national production the State took a certain portion. Now it would not also matter much about the portion taken by the State if that portion, as in this country, returned to people themselves, from whom it was raised. But the misfortune and the evil was that much of this portion did not return to the people and that the whole system of Revenue and the economic condition of the people became unnatural and oppressive, with dangers to the rulers. So long as the system went on, so long must the people go on, living wretched lives. There was a constant draining away of India's resources, and she could never, therefore, be a prosperous country. Not only that, but in time India must perish, and with it perish the British Empire.[1]
In 1895, George Hamilton stated at a session of the House of Commons that:
Time has, however, now come when the Government finds itself in possession of larger surpluses and it is, therefore, its duty as guardian of public exchequer, to reduce taxation on salt.
When the salt tax was doubled in the year 1923, it was sharply criticized in a report by the Taxation Enquiry Committee which was published two years later. This raise also evoked sharp reactions from Indian nationalists. In 1929, Pandit Nilakantha Das demanded the repeal of the salt tax in the Imperial Legislature but his pleas fell on deaf ears. In 1930, Orissa was close to open rebellion.
Mahatma Gandhi and the salt tax
Mohandas (Mahatma) Gandhi had written his first article on the salt tax in 1891 in the periodical The Vegetarian. While in South Africa, he wrote in The Indian Opinion:
The tax levied on salt in India has always been a subject of criticism. This time it has been criticized by the well-known Dr. Hutchinson who says that 'it is a great shame for the British Government in India to continue it, while a similar tax previously in force in Japan has been abolished. Salt is an essential article in our dietary. It could be said that the increasing incidence of leprosy in India was due to the salt tax. Dr. Hutchinson considers the salt tax a barbarous practice, which ill becomes the British Government.
In 1909, Mahatma Gandhi wrote in his Hind Swaraj from South Africa, urging the British administration to abolish the salt tax.
Mahatma Gandhi's Salt March
At the historic
On 12 March 1930, Gandhi embarked on a satyagraha with 78 followers from
Other salt satyagrahas
Soon after the conclusion of the
In April 1930, Congress leader
Aftermath
The British authorities turned deaf ears to the massive protests against the salt tax which rocked India during the early 1930s. The
A modified salt tax was later introduced, to the Republic of India, via the Salt Cess Act, 1953, which received the assent of the President on 26 December 1953, and was brought into force on 2 January 1954.[9] The tax, applied at a rate of 14 paise per 40 kg of salt produced, was criticised for its low collections, with the government spending twice as much to collect the tax as it earned from it.[18] This was replaced in 2017 by the Goods and Services Tax overhaul, which officially places salt in the 0% taxation category.[19]
In Pakistan, raw table salt is taxed while iodised salt is not, which has been criticised by salt manufacturers as they need to pay tax on the salt that they later iodise and sell tax-free.[20]
See also
- Gabelle – French salt tax
Notes
- ^ a b c Defiance of Salt Tax, from mkgandhi.org
- ^ a b c d e f g h i j k Mohinder Singh. "The Story of Salt". Retrieved 9 May 2008.
- ^
Mary Rochester, "The Salt Tax", Salt Museum Publication, A Salt Museum Publication, Cheshire Libraries and Museums, ISSN 0263-5593
- ^ a b c d e f "The Salt Tax, Excerpted from The Great Hedge of India by Roy Moxham, Harper Collins, India 2001". Retrieved 8 May 2008.
- ^ ISBN 9780415329200.
- ^ ISBN 9780521574310.
- ISBN 1134879458. Retrieved 21 November 2016.
- ISBN 9788170990437.
- ^ a b "The Salt Cess Act, 1953". indiankanoon.org. Retrieved 21 November 2016.
- ^ "SALT MONOPOLIES 1.India". Retrieved 9 May 2008.
- ISBN 9780415244947. Retrieved 9 May 2008.
- ^ Bakshi, Shiri Ram (1989). Indian National Movement and the Raj. India: Criterion Publications. p. 56.
- ^ Chandra, Bipan (1966). The Rise and Growth of Economic Nationalism in India: Economic Policies of Indian National leadership, 1880 to 1905. India: People's Publication House. p. 232.
- ISBN 8170417147.
- ISBN 0-87220-330-1. p. 72.
- ^ Syed Muthahar Saqaf (30 April 2008). "The day Rajaji broke the Salt Law". The Hindu. Chennai, India. Archived from the original on 3 May 2008. Retrieved 9 May 2008.
- ^ La. Su. Rengarajan. "Marathon march". Archived from the original on 1 June 2005. Retrieved 9 May 2008.
{{cite web}}
: CS1 maint: unfit URL (link) - ^ "Ten laws that India should scrap". BBC News. 7 October 2014. Retrieved 1 April 2023.
- ^ "Salt bureaucracy pounding salt". 19 December 2019. Retrieved 1 April 2023.
- ^ "Govt urged to exempt table salt from tax". The Express Tribune. 26 June 2021. Retrieved 1 April 2023.
Further reading
- Kurlansky, Mark. (2002). Salt: A world history. (pp. 333–354, "Salt and the Great Soul"). New York: Penguin Books.