The History of Union Budget

The Union Budget of India is more than just an annual financial statement. It includes a detailed analysis of the government's priorities and fiscal policies that influence the country's economic landscape. The budget provides a year-round overview of the government's revenue and expenditure plans, including those relating to social welfare, infrastructure development, taxation, and economic reforms. The history of union budget of India is a reflection of India's journey through various economic growth, challenges, and transformational stages. This article examines the Indian budget history, tracing its roots, significant milestones, and the significant changes it has seen over the years.

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.

First Indian Budget

The first budget of independent India was presented by R. K. Shanmukham Chetty on November 26, 1947. This historic budget laid the groundwork for India's economic policy in the early years of independence. The key objectives were to stabilise the economy, manage inflation, and address the immediate financial needs of the newly sovereign nation. Following are the key features and initiatives:

• Revenue and Expenditure Management: The budget focused on balancing the revenue and expenditure, ensuring that the government could meet its obligations without resorting to excessive borrowing.
• Taxation: Measures were introduced to streamline taxation and enhance revenue collection. This was crucial for funding development projects and public services.
• Foreign Exchange and Trade: The budget addressed the challenges of managing foreign exchange reserves and promoting exports, which were essential for economic stability and growth.
• Infrastructure Development: Investment in infrastructure, particularly in the agricultural and industrial sectors, was prioritised to boost productivity and employment.
• Social Welfare: The budget included provisions for social welfare programs aimed at improving the living standards of the population, particularly the underprivileged sections.

The history of union budget in India set the stage for subsequent economic planning and development, laying a strong foundation for the nation’s financial system.

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.

Budget: Printing, Formalities, Ceremonies, and Utmost Secrecy

The preparation of the Union Budget involves a series of intricate processes, characterised by meticulous planning, formalities, ceremonies, and a high degree of secrecy to prevent leaks.

Printing Process

The printing of the Union Budget is a critical phase and is carried out under strict security measures. Traditionally, the budget documents are printed at the Ministry of Finance's own press in the North Block of the Central Secretariat. This process begins with the "Halwa Ceremony," a tradition where the Finance Minister and the budget team partake in the preparation and distribution of halwa (a sweet dish), symbolising the commencement of the budget printing process.

Secrecy and Security Measures

To maintain the confidentiality of the budget details, the entire budget team is secluded within the North Block premises during the printing phase. They remain isolated from the outside world, with limited communication, until the budget is officially presented in Parliament. This practice ensures that sensitive information does not get leaked prematurely, which could impact markets and economic stability.

Presentation Ceremony

On the day of the budget presentation, the Finance Minister carries the budget documents to the Parliament in a traditional briefcase, which has now been replaced by the 'bahi-khata,' a traditional ledger, reflecting a move towards cultural heritage. The Finance Minister's budget speech, delivered in Parliament, outlines the key proposals and policy measures, followed by a detailed discussion and debate among the members of Parliament.

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.