The correct answer is option 'B', the Act of 1919.

Explanation:
The Act of 1919, also known as the Government of India Act 1919, was a significant legislative measure that brought about several reforms in the governance of British India. One of the key provisions of this act was the separation of provincial budgets from the Central budget.

Separation of Provincial Budgets:
Before the Act of 1919, the budgetary powers were centralized, and the Central Government had control over both provincial and Central budgets. However, this act introduced the concept of separate provincial budgets and authorized the Provincial legislatures to enact their budgets.

Key Provisions of the Act of 1919:
1. Dyarchy: The Act of 1919 introduced the system of dyarchy, which divided the executive functions of the government into two parts - reserved subjects and transferred subjects. The reserved subjects were under the control of the Governor-General, while the transferred subjects were under the control of the Provincial Governments. The Act allowed the Provincial Governments to make laws and enact budgets on transferred subjects.

2. Devolution of Powers: The act also devolved some legislative and executive powers to the Provincial Governments, giving them more autonomy and control over provincial affairs. This included the power to enact laws and budgets related to transferred subjects.

3. Provincial Autonomy: The Act of 1919 aimed at increasing the participation of Indians in the governance of their provinces. It introduced the concept of responsible government in the provinces, where the Provincial Governments were accountable to the Provincial Legislatures.

Significance of the Act of 1919:
The Act of 1919 marked a significant shift in the governance of British India. By separating provincial budgets from the Central budget, it granted more fiscal autonomy to the Provincial Governments. This allowed them to address regional needs and priorities effectively, leading to greater local development and empowerment.

Overall, the Act of 1919 played a crucial role in shaping the future constitutional reforms in India and laid the foundation for further advancements towards self-governance.