Budget 2018: It was not the month of February, not the morning hour, and certainly not independent India when the first Budget was presented. On April 7, 1860, the then Finance Minister of India James Wilson, under the British rule, presented the first Budget of India. Here's the history of the Union Budget of India.
Budget 2018: It was not the month of February, not the morning hour, and certainly not an independent India when the first Budget was presented. On April 7, 1860, the then Finance Minister of India James Wilson, under the British rule, presented the first Budget of India at 5 pm in the evening. The practice of the budget presentation at 5 pm was started by Sir Basil Blackett in 1924 to provide relief to officials who had worked all night.
The first Budget of independent India was presented on November 26, 1947, by Sir RK Shanmukham Chetty. The Budget, then, was prepared on the backdrop of Partition riots. While we are used to seeing several finance ministers over the years posing with a briefcase on the stairs of the Parliament, Sir RK Shanmukham Chetty did not carry one; instead, he carried a bag. The first Budget of independent India was only for seven and a half months and that was the time when the “interim budget”, that meant budget for short period, came into being.
In 1949-50 and 1950-51, John Mathai presented the Union Budget of the Republic of India, who also announced the Planning Commission. Mathai’s Budget was also the Budget that took into account all the princely states, and India as united. In 1957, Krishnamachari-Kaldor presented the Budget who tried for the distinction between active income (salaries or business) and passive income (interest or rent). Later in active income (salaries or business) and passive income (interest or rent), Jawaharlal Nehru became the first Prime Minister to present the Budget when he held the finance minister portfolio as well.
Budgets & Birthdays
Morarji Desai in 1959-61 and 1963-64 presented by the Union Budgets, including an interim budget 1962-63. By this time, the presentation of the Budget had moved to the last day of February but continued with 5 pm time slot. Interestingly, Morarji Desai got to present two Budgets on his birthday, on February 29 in 1964 and 1968. Morarji Desai presented budgets that included five annual budgets and an interim budget during his first stint and three final budgets and one interim budget in his second tenure when he was both the Finance Minister and the Deputy Prime Minister of India.
Budget presentation by a woman
After Morarji Desai resigned, Indira Gandhi who was the Prime Minister, also took over the portfolio of the finance minister and became the first woman to present the Indian Budget in 1970-71. In 1964-65, TT Krishnamachari introduced voluntary disclosure of concealed income scheme in India for the first time. The next Budget followed first disclosure scheme for black money.
Black Budget, Corporate Tax
The 1973-74 India Budget became the ‘Black Budget’ in India as that year the fiscal deficit of the country was Rs 550 crore. Pranab Mukherjee, the first Rajya Sabha member to hold the Finance portfolio, presented the annual budgets for the financial years 1982-83, 1983–84 and 1984-85. Then, Rajiv Gandhi presented the budget for 1987-89, after VP Singh quit his government, and in the process became the third Prime Minister to present a budget after his mother and grandfather. It was Rajiv Gandhi who introduced the Corporate tax (known as Minimum Alternate Tax) in 1987-88 Budget.
Historic Budget of liberalisation
ND Tiwari presented the budget for 1988-89, SB Chavan for 1989-90, while Madhu Dandawate presented the Union budget for 1990-91. The interim Budget of 1992-1993, presented by Manmohan Singh after an election was forced, became one of the historically important Budget as he announced reducing import duty from over 300% to 50%, paving way for liberalisation. Manmohan Singh, in his Budget speech, said, “It is said that child is the father of the man, but some of our taxpayers have converted children into tax shelters for their fathers.” Following year, Manmohan Singh introduced Service Tax.
After elections in 1996, a non-Congress ministry assumed office. Hence the financial budget for 1996-97 was presented by P. Chidambaram, who then belonged to Tamil Maanila Congress. After the general elections in March 1998 that led to the Bharatiya Janata Party forming the Central Government, Yashwant Sinha, the then Finance Minister in this government, presented the interim and final budgets for 1998-99.
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Change of time
After general elections in 1999, Sinha again became the Finance Minister and presented four annual budgets from 1999-2000 to 2002-2003. Due to elections in May 2004, an interim budget was presented by Jaswant Singh. He, in 2001, changed the timing of the Budget presentation from 5 pm to 11 am. Following years, Pranab Mukherjee and P Chidambaram presented the Union Budget under UPA-1 and UPA-2 governments.
Change of date, Railway Budget merger
Under the Narendra Modi government, the Union Budget was presented by Finance Minister Arun Jaitley, who in the year 2017 announced two important decisions; first, merging Railway Budget with the Union Budget and second advancing the Budget presentation from the last day of February to the first day of February. Finance Minister Arun Jaitley will present the Union Budget 2018 on February 1.