Mayo’s Resolution of 1870

Financial decentralisation was a legislative devolution inaugurated by the Indian Councils Act of 1861. Apart from the annual grant from imperial Government, the provincial governments were authorised to resort to local taxation to balance their budgets. This was done in context of transfer of certain departments of administration, such as medical services, education and roads, to the control of provincial governments. This was the beginning of local finance. Mayo’s Resolution emphasised, “Local interest, supervision and care are necessary for success in the management of the funds devoted to education, sanitation, medical relief and local public works.”

The various provincial governments such as in Bengal, Madras, North-Western Province, Punjab, passed municipal acts to implement the policy outlined.