The first step towards separating provincial finances from central finances (financial decentralisation, 1870) was taken by Viceroy:

The first step towards separating provincial finances from central finances (financial decentralisation) was taken by Lord Mayo, the Viceroy of India from 1869 to 1872, through his resolution of 1870.

About the reform:

• Before this, all revenues were collected by the central government, which then gave grants to the provinces for their expenses; this led to waste and constant demands from the provinces.
• Under Mayo's scheme, the provinces were given control of certain departments, such as police, jails, education, medical services and roads.
• They were given a fixed annual grant from the centre for these services, and were allowed to raise additional local taxes to meet their needs.
• This made the provinces more responsible for their own finances.
• It was the beginning of financial decentralisation in India.
• The idea was later extended by later Viceroys, who gave the provinces a share of certain revenues.

NCERT on local and provincial finance:

NCERT notes that the British gradually introduced local bodies and provincial finance to reduce the burden on the central government.

Other measures of Lord Mayo:

• He organised a statistical survey of India.
• The first census of India was conducted under him (though not at the same time everywhere).
• He set up a separate Department of Agriculture and Commerce.
• He founded the Mayo College at Ajmer, for the education of the sons of Indian princes, and the Rajkumar College at Rajkot was also founded in his time.
• He improved relations with Afghanistan (meeting Sher Ali at Ambala).

His death:

• He was assassinated while visiting the penal settlement at Port Blair in the Andaman Islands, by Sher Ali Afridi, a Pathan convict.
• He was the only Viceroy to be killed in office.

Why not the other options?

• ✗Lytton, Northbrook and Elgin I followed other policies.