With the Lok Sabha elections just around the corner, Finance Minister Nirmala Sitharaman is expected to deliver a budget that balances fiscal responsibility with popular measures aimed at garnering public support. This upcoming budget is particularly significant as it sets the stage for re-elections in 2024 and will be closely scrutinized for its economic and political implications.
A Brief History of India's Budget
The term ‘Budget’ is derived from the French word ‘Bougette,’ meaning a small bag or pouch. The concept of a budget, as we understand it today, was introduced to India during the British colonial era. The first-ever budget for pre-independent India was presented by James Wilson in 1860. Wilson, a Scottish businessman and founder of The Economist magazine and Standard Chartered Bank, laid the foundation for India’s financial planning and management. He was a member of the British Parliament and served as the Finance Secretary to the UK Treasury.
Key Milestones in India's Budget History
1. First Budget of Independent India
Independent India's first annual budget was presented by R.K. Shanmukham Chetty on February 28, 1948. This came three months after his interim budget on November 26, 1947, which assessed the nation's financial and economic status post-independence.
2. Prime Ministers Presenting the Budget
There have been three occasions when the Prime Minister of India presented the Union Budget. Jawaharlal Nehru did so in 1958, followed by Indira Gandhi in 1970, and Rajiv Gandhi in 1987.
3. Longest Budget Speech
Finance Minister Nirmala Sitharaman holds the record for delivering the longest budget speech in 2020, which lasted 2 hours and 42 minutes. She is also the first full-time female finance minister of India.
4. Paperless Budget
For the first time in India's history, the Budget went paperless in 2021, marking a significant shift towards digital governance.
5. Most Budgets Presented
The record for presenting the maximum number of budgets goes to Former Finance Minister Morarji Desai, who presented it ten times. He is followed by P. Chidambaram (9), Pranab Mukherjee, and Yashwant Sinha (8 each).
6. Budget Presentation Time
Historically, the budget was presented at 5 PM to coincide with the working hours of the British Parliament. This changed in 1999 when Finance Minister Yashwant Sinha moved the presentation to 11 AM. His 2000 budget, known as the "Millennium Budget," is credited with setting India's IT sector on a growth trajectory.
7. Shift in Budget Presentation Date
In 2017, the date of the budget presentation was moved from February 28th to February 1st. This change aimed to ensure that all parliamentary approvals for government allocations were in place before the start of the financial year on April 1. Additionally, the Railway Budget was merged with the Union Budget in the same year.
8. Historic Budgets
The 1991 Budget presented by Manmohan Singh is considered the most transformative, as it liberalized the Indian economy, ending the license-permit-quota raj and opening up India to global competition.
9. Halwa Ceremony
A unique tradition associated with the Indian budget is the "halwa ceremony," which marks the beginning of the budget printing process. Following this ceremony, officials involved in budget preparation are locked in the Ministry of Finance premises until the budget is presented, ensuring complete secrecy.
10. Budget Leak
The budget was leaked in 1950, prompting the government to move the printing process to a secure press at Minto Road. In 1980, the printing was further shifted to the basement of North Block in Delhi.
Interim Budgets
India’s first interim budget was presented by R.K. Shanmukham Chetty in 1947 to address the immediate economic challenges post-independence. Since then, 14 interim budgets have been presented, with the last one by Piyush Goyal in February 2019. Interim budgets typically refrain from major policy announcements, focusing instead on essential fiscal measures to maintain continuity until a new government is formed. However, recent interim budgets have seen significant announcements, reflecting the evolving political and economic landscape.
From Briefcase to Digital Tablet
Over the years, the presentation style of the budget has evolved. In 2019, Nirmala Sitharaman replaced the traditional budget briefcase with a ‘bahi khata’ (ledger) in a nod to Indian tradition. The COVID-19 pandemic further accelerated the transition to a paperless budget, with the 2021-22 budget being presented on a digital tablet.
Conclusion
The Union Budget is not just a financial document; it is a reflection of the government’s vision and priorities. As we look forward to the interim budget of 2024, it is essential to recognize its historical significance and the evolving traditions that shape its presentation. With the re-elections approaching, this budget will play a crucial role in setting the economic agenda for the coming years, balancing the immediate needs of the populace with long-term developmental goals.
As the budget unfurls with each line and measure, it promises growth and fiscal treasure.
