Subsequently to the Mutiny the number of Infantry regiments in Bengal was reduced from a hundred and forty-six, as it had been in 1857, to seventy-two; the Bombay and Madras armies underwent similar reductions. Altogether seventy-seven native regiments had been reduced since 1859. At the same time the number of men in each regiment was reduced to an uniform standard of 600 privates. 50,000 military police were disbanded. The effect of these changes was to reduce the number of the native army from 284,000 to about 140,000 men, a reduction, inclusive of the 50,000 police, not far short of 200,000 men. The numerical reductions of 1861, with corresponding retrenchments in commissariat, ordnance, and other establishments, resulted in a saving of about three millions and a quarter. Another half-million was retrenched from civil expenditure. The year's revenue, by increase in salt duties and natural development, was estimated to show an increase of two millions.
Another half-million was provided by an arrangement, which has subsequently developed into the most important characteristic of the modern financial system, its decentralisation. It took its rise in Mr. Laing's proposal to confide to the local governments certain items of taxation — in the present instance tobacco — leaving them to make the best use they could of its proceeds for local purposes, instead of the assignment which they would, had the financial position allowed, have received from the Imperial
