The history of the Indian budget

The history of the Indian budget is rich and reflective of the country’s economic evolution and political changes. Here are some key highlights:

Pre-Independence

The introduction of the concept of a budget in India by James Wilson of the East India Company on April 7, 1860, marked the beginning of formal financial planning in the country.

Post Independence

The first budget of independent India was presented on November 26, 1947, by Finance Minister R. K. Shanmukham Chetty. In 1955, the budget began to be printed in both Hindi and English for wider accessibility. The tradition of presenting the budget at 5 pm on the last working day of February continued until 1999, when Finance Minister Yashwant Sinha moved it to 11 am. In 2017, Finance Minister Arun Jaitley moved the budget presentation date to February 1 to allow more time for implementation before the new financial year starts.

Notable Budget

1973-74 Black Budget: Y. B. Chavan presented a budget with a fiscal deficit of Rs 550 crore.
1986 Carrot and Stick Budget: V. P. Singh introduced the MODVAT scheme, signaling the end of the license raj.
1991 Epochal Budget: Manmohan Singh’s budget kickstarted economic liberalization by reducing customs duties and encouraging foreign investment.
1997-98 Dream Budget: P. Chidambaram aimed at tax reforms and tackling black money.
2000 Millennium Budget: Yashwant Sinha focused on the IT sector and tax reforms.
2021 Once-in-a-Century Budget: Nirmala Sitharaman prioritized post-pandemic recovery, infrastructure development, and healthcare.

Significant Record

Nirmala Sitharaman delivered the longest budget speech on record in 2020, lasting 2 hours and 42 minutes. Morarji Desai holds the record for presenting the most budgets with 10, followed by P. Chidambaram with 9, and Pranab Mukherjee with 8. The budget for 2021-22 was the first paperless budget in response to the COVID-19 pandemic.

In recent updates, the 2021 budget has prioritized a digital census, the introduction of a vehicle scrapping policy, and substantial investments in infrastructure and healthcare. Additionally, in 2017, the railway budget was integrated with the general budget after 92 years of being presented independently.

Key Highlights

Colonial Era
The groundwork for structured financial planning in colonial India was laid by James Wilson’s Budget in 1860, the first budget presented by the East India Company .

Post-Independence Budgets
Setting the tone for economic policies in the newly independent nation, R. K. Shanmukham Chetty presented India’s first budget in 1947

Landmark Changes
Starting in 2017, the budget presentation time and date were shifted from the colonial practice of 5 pm on the last working day of February to 11 am on February 1

Iconic Budgets
During Indira Gandhi’s tenure, the Black Budget of 1973-74, known for its high fiscal deficit, was presented by Y. B. Chavan.
Introduced during the Carrot and Stick Budget of 1986, MODVAT and steps against tax evasion marked a move towards dismantling the license raj .

Considered a turning point in India’s economic history, the Epochal Budget of 1991 under Manmohan Singh introduced economic liberalization and ended the license raj .
Focused on tax reforms and reducing black money using the Laffer Curve principle, P. Chidambaram’s Dream Budget of 1997-98 was notable.
Yashwant Sinha’s Millennium Budget of 2000 focused on the IT sector and introduced significant tax reforms.
Known for its several rolled-back proposals, the Rollback Budget of 2002-03 was presented by Yashwant Sinha during the NDA government headed by Atal Bihari Vajpayee .
Nirmala Sitharaman’s Once-in-a-Century Budget of 2021 aimed at post-pandemic recovery with a focus on infrastructure and healthcare

Budget Presentation and Records
To ensure wider accessibility, the budget has been printed in both Hindi and English since 1955.
Nirmala Sitharaman became the second woman to present the budget in 2019, following Indira Gandhi who presented the 1970-71 budget.
Due to the COVID-19 pandemic, the 2021-22 budget was the first paperless budget.

Recent Highlights
Significant allocations were made for infrastructure, healthcare, and clean air initiatives in the 2021 budget. The introduction of the vehicle scrapping policy and the Production Linked Incentive (PLI) Scheme were notable features aimed at boosting the manufacturing sector .

Economic Reforms and Impact
Credited with opening up the Indian economy, reducing import tariffs, and encouraging foreign investment, Manmohan Singh’s 1991 budget played a key role in economic liberalization.
P. Chidambaram’s budget in 1997-98 is remembered for its significant tax reforms, including reducing income tax rates and simplifying the tax structure.

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The history of the Indian budget