since 1887-88. The local consumption shows a tendency to increase. The
number of shops per head of population has on the whole increased; and, although
the revenue has increased, this is due partly to increased consumption, and partly
to keener competition in the auction sales of licenses.

The basis of good administration has been laid, but progress has not been
secured, and to this result it is essential that attention should now be directed.

Ganja exported to other prov-
inces and Native States should
pay duty.

649. One important defect of the system is that exported ganja is very
lightly taxed. In regard to this subject, the Excise
Commissioner in 1887 remarked: "The part played
by the Khandwa store as an entrepĂ´t for the supply of the ganja demand
of those provinces (the Central Provinces) is quite insignificant when compared
with its use as a mart for the convenience of foreign purchasers. To it throng
traders from Bhopal, Indore, Gwalior, Rutlam, Dhar, Jodhpur, Udaipur, Rewa,
Panna, Baroda, and other States of less note; and licensed vendors from the
North-Western Provinces compete with contractors from Berar for the purchase
of the cultivators' stock. Between 6,000 and 7,000 maunds of ganja have on
the average of the last four years been annually exported from Khandwa to
other provinces and Native States." Since these words were written the
permit and registration fees have been imposed, and all the exported ganja
pays something before being removed for export. But besides a small fee for
storage, Government licensed vendors exporting to the North-Western Provinces
or other British provinces only pay Re. 1 per maund by way of registration fees,
and foreign purchasers only pay Rs. 2 per maund for permit and registration
fees. An instance is here afforded of the necessity of the systematic treatment ad-
vocated in Chapter XIV, paragraphs 588 and 590. A large amount of ganja which
leaves the Khandwa store is insufficiently taxed, and it is absolutely necessary that
arrangements should be made both with British provinces and with Native
States to ensure its being adequately taxed in future. Whether the duty should
be levied at the place of production or at the place of consumption is a matter
of detail: the main point is that it should be levied somewhere before it reaches
the consumers.

Duty should be raised also on
ganja consumed in the province.

650. The Commission cannot regard the possible falling off in retail license
fees as any reason for refusing to raise the duty on the
Khandwa ganja consumed in the province unless such
a falling off produces other consequences detrimental to the Administration. Caution
is always necessary in raising the duty lest it should lead to illicit practices, and
the circumstances of the Central Provinces require special watchfulness in this
respect. The difficulties in the way of increasing the duty owing to the much
lower price of the drug beyond the borders of the province are brought out
clearly in the Excise Commissioner's memorandum. But making all allowances
for these difficulties and for the fact that the Khandwa ganja is inferior to
that produced at Rajshahi, the Commission are of opinion that the rate might
safely be raised.

The system of supplying ganja to
retail vendors at a fixed price.

651. The question, however, is one which is intimately bound up with the
whole system of monopoly existing in the Central Prov-
inces, and this system demands close examination.
It has arisen, as has been shown, from special circumstances. Its main features are