The History of Union Budget

The History of Union Budget

According to Article 112 of the Indian Constitution, the Union Budget is a financial summary of the government's expected revenue and spending for the given year. The Union Budget is created annually from April 1 to March 31 and is divided into two parts: (a) the revenue budget and (b) the capital budget

Here’s a brief history of the Union Budget of India.

History of Union Budget

India's first budget was issued on April 7, 1860, while it was still under British colonial administration. It was launched by India's then-Finance Minister, James Wilson.

Sir R.K. Shanmugham Chetty, Independent India's first Finance Minister, delivered the country's first Union Budget on November 26, 1947. It is worth noting that the first Union Budget was delivered amid extensive rioting resulting from India's division. This budget was scheduled to last seven and a half months, after which the next budget would be adopted on April 1, 1948. During the first Union Budget, India and Pakistan agreed to use the same currency until September 1948.

Sir Chetty resigned as Finance Minister of India, and the task was eventually handed on to John Mathai, who delivered the successive Union Budgets of 1949-50 and 1950-51. The budget for 1949-50 was the first budget created for a united India, which included all princely states.

Open Demat Account

Table of Content

  1. History of Union Budget
  2. Budget Formalities
  3. Lesser-Known Facts of the Union Budget
  4. How Union Budgets Can Change the Course of the Future?

Budget Formalities

The Union Budget is kept in strict secrecy, with the Finance Minister not allowed to hold the Blue Sheet, a critical document based on statistics and key numbers. The process began in 1950 on Rashtrapati Bhavan grounds but was relocated to a government-operated press on Minto Road in 1980 due to a data breach. After 1980, budget papers were printed in a basement in the North Block, where the Finance Ministry is located. The Halwa Ceremony marks the beginning of the printing of budget documents, with those with direct access locked down in the basement. The Finance Minister is prohibited from carrying a cell phone under these conditions.

Lesser-Known Facts of the Union Budget

  • The Railway Budget of the country has always been introduced as a distinct budget for the last 92 years, until 2017, when it was merged into the Union Budget.
  • Indira Gandhi was the only woman to propose the budget as both Finance Minister and Prime Minister.
  • The current administration moved the budget announcement from the final working day of February to the first working day of February.
  • The Indian media dubbed the Union Budget of India for 1997-98 the "Dream Budget" because it laid out a road plan for economic changes in India, such as lower income tax rates, the repeal of the corporation tax surcharge, and lower corporate tax rates.
  • The budget for the fiscal year 1973-74 is known as the "Black Budget" since the country had a Rs550 crore deficit.

How Union Budgets Can Change the Course of the Future?

The 1991-92 Union Budget, led by Finance Minister Dr Manmohan Singh, significantly accelerated India's growth and facilitated international investment. The 1997-98 Union Budget, presented by P. Chidambaram, introduced lower income taxes and customs levies, aiming to reduce black money and expand the tax base. The Millennium Budget, also known as the 2000-01 Union Budget, transformed India's economy into a technology powerhouse, with a 10% decrease in customs charges on optical fibres and a 20% drop in mobile phones.

Conclusion

Some of the particulars connected with the Union Budget continue to be practised today. For example, budget documents have traditionally been carried in a briefcase. Briefcases have been used since the introduction of the first budget in 1860. The Union Budget outlines the government's projected revenue and expenditures for a certain fiscal year. It is one of the most significant presentations in Parliament.

FAQs on the History of Union Budget

The Union Budget is a crucial document that outlines the government's financial plans and policies. It plays a pivotal role in shaping the economic trajectory of the country and has historical significance in guiding fiscal decisions.

The presentation and format of the Union Budget have changed since Independence. Understanding the historical evolution provides insights into the government's approach to economic planning and financial management.

A historical overview of the Union Budget includes information on the number of regular annual budgets, interim budgets presented during election years, and any special budgets that may have been introduced to address unique economic situations.

Interim budgets, also known as 'vote on account,' have been presented in certain years, especially during election periods. Understanding the historical context of interim budgets helps in comprehending their purpose and impact on fiscal planning.

Exploring the history of the Union Budget unveils notable events, reforms, or decisions announced during budget presentations that have had a lasting impact on the Indian economy. Understanding these milestones provides context to the nation's economic journey.