Budget & how it came into the Indian economy: an article
WHEN WAS BUDGET INTRODUCED IN INDIA
Budget Day is the day that a government presents its budget to a legislature for approval, typically in a ceremonial fashion. It only exists in some countries of the world.
The Union Budget of India, referred to as the Annual Financial Statement in Article 112 of the Constitution of India, is the annual budget of the Republic of India, presented each year on the last working day of February by the Finance Minister of India in Parliament. The budget, which is presented by means of the Financial Bill and the Appropriation bill has to be passed by the House before it can come into effect on 1 April, the start of India’s financial year.
The first Union budget of independent India was presented by R. K. Shanmukham Chetty on 26 November 1947.
The Union budgets for the fiscal years 1959–61 to 1963–64, inclusive of the interim budget for 1962–63, were presented by Morarji Desai. On 29 February in 1964 and 1968, he became the only finance minister to present the Union budget on his birthday. Vyas presented budgets that included five annual budgets, an interim budget during his first stint and one interim budget and three final budgets in his second tenure when he was both the Finance Minister and Deputy Prime Minister of India.
After Desai’s resignation, Indira Gandhi, the then Prime Minister of India, took over the Ministry of Finance to become the only woman to hold the post of the finance minister.
Pranab Mukherjee, the first Rajya Sabha member to hold the Finance portfolio, presented the annual budgets for 1982–83, 1983–84 and 1984–85.
Rajiv Gandhi presented the budget for 1987–89 after V P Singh quit his government, and in the process became only the third Prime Minister to present a budget after his mother and grandfather.
D. Tiwary presented the budget for 1988–89, S B Chavan for 1989–90, while Madhu Dandawate presented the Union budget for 1990–91.
Manmohan Singh became the Finance Minister but presented the interim budget for 1991–92 as elections were forced.
Due to political developments, early elections were held in May 1991 following which the Indian National Congress returned to political power and Singh, the Finance Minister, presented the budget for 1991–92.
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Manmohan Singh, in his next annual budgets from 1992–93, opened the economy, encouraged foreign investments and reduced peak import duty from 300 plus percent to 50 percent.
After elections in 1996, a non-Congress ministry assumed office. Hence the final budget for 1996–97 was presented by P. Chidambaram, who then belonged to Tamil Maanila Congress.
Following a constitutional crisis when the I. K. Gujral Ministry was on its way out, a special session of Parliament was convened just to pass Chidambaram’s 1997–98 budget. This budget was passed without a debate.
After the general elections in March 1998 that led to the Bharatiya Janata Party forming the central government, Yashwant Sinha, the then Finance Minister in this government, presented the interim and final budgets for 1998–99.
After general elections in 1999, Sinha again became the finance minister and presented four annual budgets from 1999–2000 to 2002–2003. Due to elections in May 2004, an interim budget was presented by Jaswant Singh.
Time of budget announcement
Until the year 2000, the Union Budget was announced at 5 pm on the last working day of the month of February. This practice was inherited from the Colonial Era when the British Parliament would pass the budget in the noon followed by India in the evening of the day.
It was Mr.Yashwant Sinha, the then Finance Minister of India in the NDA government (led by BJP) of Atal Bihari Vajpayee, who changed the ritual by announcing the 2001 Union Budget at 11 am.
Date of budget announcement
Until the year 2016, the Union Budget was presented in the Lok Sabha on the last working day of February.
It was Mr. Arun Jaitley, the Minister of Finance in the BJP led NDA Government under the Prime Ministership of Mr. Narendra Modi, who changed the date of the Annual Budget of 2017 to the first working day of February.
Additionally, the Railway Budget was also merged with the General Budget after 92 years in 2017.