History of Budget

 

·       The term budget is related to Latin bulga, which refers to a ‘leather bag. The term comes from a Gaulish source connected to the Irish bolg, which means a bag. It got associated with finance in mid18th century following up a pamphlet titled “The Budget Opened” sarcastically attacking the tax plans of Great Britain’s first prime Minister Sir Robert Walpole.

·       However, the term budget was first used in 1760 for statement of the actual results of receipts and expenditure in the preceding fiscal year presented in House of Commons by UK’s Chancellor of Exchequer.  The term budget was used in current context only after mid19th century. 20th century was a stimulating era for budgeting.

·       It was only after 1950s that budget was more rationally used for public planning and policy. The development of the theoretical framework of budgeting during 20th century has been shaped by the political, social and administrative players and circumstances.

First Colonial Budget

·       The first ever Indian budget during its colonial era was presented by Scottish economist and politician James Wilson in 1860, two years after the transfer of Indian administration from East-India Company to British Crown. He was designation was Finance Member of the India Council that advised the Indian Viceroy, was also the founder of The Economist and described by Karl Marx as an "economical mandarin of high standing".

First Indian Budget

·       The first (Provisional) Budget of independent India was presented on November 26, 1947 by the country’s Finance Minister RK Shanmukham Chetti. The revised budget was presented in March 1948.

First PM to present Budget

·       India’s first prime minister Jawaharlal Nehru was also the first in the top post to present the Budget when he held the finance portfolio in 1958-59.

Inclusion of Hindi in Budget

·       The budget used to be published only in English until 1955. Later, from 1955-56, the government started to publish it in Hindi as well.

First woman to present the budget

·       Former prime minister Indira Gandhi was the first woman to present the budget of independent India. As prime minister, she also held the finance portfolio. However, Nirmala Sitharaman on July 5, 2019 became the first full-time woman finance minister of India to present the budget of the country.

Black Budget

·       In 1973-74, former finance minister Yashwantrao Chavan presented the budget with a fiscal deficit of about ₹550 crore, the maximum until that time. It was then termed as ‘Black Budget’. It followed the India-Pakistan war in 1971 and failed monsoon season.

The Epochal Budget

·       The 1991 budget by Manmohan Singh is known as the Epochal (or historically significant) budget as it marked the beginning of economic liberalization in India. PV Narasimha Rao was then the prime minister of India.

Dream Budget

·       Finance minister P Chidambaram in 1997-98 presented what is known as the Dream Budget of India. He lowered tax slabs of personal income tax as well corporate taxes which won the hearts of the common people. Also, the IT sector got a boost in this budget.

Millennium Budget 

·       The Millennium Budget of 2000-01 presented by then finance minister Yashwant Sinha promoted India as a software development hub, leading to an exponential growth of the Indian IT Industry and its positioning as the software exporter on the global map.

 

Merger of budgets and change in dates

·       Until 2017, there used to be two different budgets — Indian Budget and a separate Railway Budget. The Modi government merged these two in 2017 and changed the date of budget presentation to February 1 from March 1. Arun Jaitely was the first finance minister to present the merged budget on new date of presentation.

Change in time

·       Until 2000, the budget was presented at 5 pm on the last working day of February. In 2001, former finance minister Yashwant Sinha changed it to 11 am.

Bahi Khata instead of briefcase

·       As the first full-time finance minister, Sitharaman had made a significant shift in 2019 by starting the custom of carrying budget documents in a “Bahi Khata” (traditional red cloth) instead of briefcase. This was termed as an apparent shift from the “British hangover.”

Printing of Budget

·       The budget used to be printed at the Rashtrapati Bhavan until 1950, when it got leaked. The government was then forced to move budget printing to a press at Minto Road in New Delhi. Later, the printing venue was shifted to a government press in the North Block in 1980.

Paperless Budget

·       In 2021 first in India’s history, the Budget will be entirely paperless, i.e. it won’t be printed and all MPs and government officials will have to use soft copies through the official website. No hard copies of budget will be printed due to covid-19 pandemic. The Finance Ministry has launched the 'Union Budget app' to enable smooth access to Budget-related documents.

Halwa caremony

·       Ahead of the budget presentation every year, the halwa ceremony recognizes the efforts of all staff members and officials who were part of the budget-making process. According to the ritual, a sweet dish or Indian dessert (halwa) is prepared in a large vessel and served to the officials of the Finance Ministry.