Overview of the History of India's Union Budget

Jul 16, 2024

Overview of the History of India's Union Budget

Introduction

  • Presenter: नमृता सिंह
  • Channel: Sunset TV
  • Focus: Economic history of India's Union Budget

Early History

  • First Budget: 1860 by James Wilson (Scottish Economist)
  • Introduced income tax
  • Aimed to reform financial system and introduce a new tax structure and paper currency

Post-Independence Era

  • First Budget after Independence: November 26, 1947 by R. K. Shanmukham Chetty
  • Context: Following Partition, focused on economic hardship (food grain shortage, high imports, sky-rocketing inflation)
  • Significant Allocation: 46% for defense services

Milestones and Key Changes

  1. 1949-50 Budget: First to cover all princely states under United India
  2. 1950-51 Budget: Establishment of Planning Commission to direct structured development programs (replaced by NITI Aayog in 2015)
  3. 1955-56 Budget: Tax exemption limits for married and unmarried individuals, marked break from British tradition by publishing in both Hindi and English
  4. 1962-69: Morarji Desai holds record for presenting the highest number of budgets (10)
    • Notable Budget: 1973-74 - The 'Black Budget' with a deficit of ₹550 crore
  5. 1985-86 Budget: Presented by V. P. Singh, initiated dismantling of 'License Raj'
  6. 1991 Reforms: Economic liberalization under PM P. V. Narasimha Rao and Finance Minister Manmohan Singh
    • Reforms: Slashed customs duties, boosted exports
  7. 1997-98 'Dream Budget': Proposed by P. Chidambaram, comprehensive economic reform roadmap
  8. Shift to AM Presentations: Started by Yashwant Sinha in 1999-2000 FY, changing from traditional 5 PM to 11 AM

Recent Developments

  • 2004-2014 (UPA Government): Focus on social welfare, rural livelihoods, infrastructure development
  • 2014-2019 (NDA Government): Introduction of welfare programs, investment in infrastructure and defense, digitization initiatives
    • 2017 Major Reforms: Shift of budget presentation date to Feb 1, merging of Railway and Union Budget
    • Digital Initiatives: E-Budget presentation using a tablet, emphasis on paperless processes
    • COVID-19 Budget (2020-21): Healthcare funding, vaccination, capital investments
    • Amrit Kaal Call (2023-24 Budget): Vision for India's development by 2047, focus on key growth pillars (youth, poor, women, farmers)

Special Mentions

  • Longest Budget Speech Record: Nirmala Sitharaman, 2 hours and 42 minutes in 2020
  • Historical Traditions: Red briefcase to 'bahi khata' to tablet, reflecting the transition from colonial to modern and digital India
  • Halwa Ceremony: Importance in budget preparation secrecy

Challenges and Achievements

  • Consistent challenges: Controlling inflation, boosting foreign exchange earnings, investments
  • Achievements: Foreign exchange reserve of $568.7 billion, significant FDI

Conclusion

  • Reflections on India's journey through financial challenges, reforms, and growth
  • Emphasis on future aspirations and continued reforms