Acworth Committee
Also called: Acworth Committee 1920-21 · Topic: Colonial Economy: Land Revenue, Drain, Deindustrialisation · NCERT: Beyond NCERT
Meaning
The Acworth Committee was a committee set up in 1920–21 to study how Indian railways were run and paid for. Its chairman was Sir William Acworth, a British expert on railway economics. It said the State itself should manage the railways instead of private British companies. It also said railway money should be kept apart from the government's general budget, which is the main yearly account of income and spending. This matters because under the old guarantee system, Indian taxpayers carried the losses of private companies while the profits went mostly to shareholders in Britain.
Example
The committee's advice led to the separation of the Railway budget from the General budget in 1924. Railways now gave the general budget a fixed, assured share of their earnings. Soon after, c. 1925, the State took over the management of big company lines such as the East Indian Railway and the Great Indian Peninsula Railway. But the reform mostly steadied the government's accounts. It did not change the main purpose of the railways, which were laid out to carry raw materials from the interior to the ports for export.
Don't confuse with
- Merger of the Railway budget (2017): this joined the Railway budget back into the Union Budget. It reversed the separation of 1924 that came from the Acworth Committee's advice.
- Guarantee system: this was the earlier arrangement in which the State promised private railway companies a fixed return of about 4.5–5% on their money. The Acworth Committee's push for State management was a move away from that company-run model.