All eyes are on India’s Finance Minister Nirmala Sitharaman as all set to announce the Union Budget 2021, today, February 1, 2021. With the Indian economy seeing major downturn and recessionary conditions in most sectors, this year’s Union Budget is likely to be one of the most significant ones in Indian history.
Independent India’s first budget was announced by Shanmukham Chetty on November 26, 1947. It was an iconic moment for the entire country.
Here are a few iconic budgets in Indian history
First budget of Republic of India:
The first budget of the Republic of India was announced by John Mathai under the government of Jawaharlal Nehru. The budget was iconic as it mentioned a roadmap for the creation of the Planning Commission, which was a key instrument in how resources were allocated for maximum effectiveness.
T T Krishnamachari (1957-58):
Wealth Tax was introduced in Budget 1957-58, presented by T T Krishnamachari. Levied on the total value of personal assets, it remained in the picture in one form or the other till Finance Minister Nirmala Sitharaman abolished it in 2015, her maiden Budget. During his next stint as finance minister, Krishnamachari, in his interim and Union Budgets of 1965-66, introduced the first voluntary disclosure income scheme (VDIS) against black money — it was the first such effort.
Morarji Desai (1959-64, 1967-1969):
With eight annual and two interim budgets, Morarji Desai is the Finance Minister who has presented the maximum number of budgets so far.
In Desai’s 1986 Budget did away with stamping and assessment of goods by the excise department right at the factory gate. In a boost to manufacturing, he introduced a system of self-assessment for manufacturers. The reform reduced the administrative burden on the excise department.
Y B Chavan (1971-75):
Yashwantrao Balwantrao Chavan’s 1973 Budget was called the ‘Black Budget’. The color black was the media’s symbolic reference to the budget speech set during a time-period of immense economic turmoil. The term black-budget remains an inglorious reference to the hardships of 1973.
The immediate observation made from Chavan’s speech was a massive deficit of Rs 550 crores. What complicated the situation was the situation of drought coupled with the war in Bangladesh or East Pakistan.
1986: The carrot and stick Budget
VP Singh, Minister of Finance in the Congress government presented the Budget on February 28, 1986.
Introduced MODVAT credit. This allowed credit/ set-off of duty paid on raw materials against the duty on final products. Why he did it: To reduce the cascading effect of taxes on the final price of goods.
1991: The epochal Budget:
Manmohan Singh, Finance Minister in the Narasimha Rao government presented the Budget on July 24, 1991.
Overhauled the import-export policy, slashed import licensing and went for vigorous export promotion and optimal import compression to expose Indian industry to competition from abroad. Began rationalisation of duty structures by pruning the peak customs duty from 220 per cent to 150 per cent.
1997: The dream Budget:
Palaniappan Chidambaram, Finance Minister in the United Front government presented the Budget on February 28, 1997.
Made tax rates moderate for individuals as well as companies. Allowed companies to adjust MAT paid in earlier years against tax liability in subsequent years. Launched the Voluntary Disclosure of Income Scheme or VDIS, to bring out black money. Phased out ad hoc treasury bills used for financing the budget deficit.
2005: Aam Aadmi Budget:
Commonly known as the Aam Aadmi Budget and tabled by Finance Minister P Chidambaram, the Budget featured lower corporate tax rates and customs duty, MNREGA and RTI.
Arun Jaitley’s 2017 Budget:
It’s presentation merged the Railway Budget with the General Budget, thus ending the 92-year-old tradition of having a separate Railway Budget.
This was also the first budget after the Modi government took two crucial decisions: passing Goods and Services Tax and demonetisation. The budget tabled by former finance minister Arun Jaitley focused on the farm sector, healthcare and fiscal management. A sum of Rs10 lakh crore was allocated as credit to farmers. Moreover, the National Bank for Agriculture and Rural Development (NABARD) fund was increased to Rs 40,000 crore.
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