Come February 1 and Finance Minister Nirmala Sitharaman will present the Union Budget 2022 as India reels under a new wave of coronavirus driven by the Omicron edition.
The Ministry of Parliamentary Affairs said in a statement on Friday: “The Union Budget for 2022-23 will be laid in the Rajya Sabha after being presented in the Lok Sabha on Tuesday, February 1 at 11.00 am.” The first part of the budget session will start from January 31 and will continue till February 11. The second part of the budget session will begin on March 14 and end on April 8.
As the nation awaits with hopes of relief to the common man in the Budget, News18 takes a look at the history of the document for you and how it came into existence.
Pre-independence India saw its first budget on February 18, 1869, presented by James Wilson, the ‘Finance Member of the India Council’. He advised the Indian Viceroy and was described by Karl Marx as a “economical Mandarin of a high standard”.
The British Crown, still reeling from the effects of the Revolt of 1857, hired a Scottish businessman to find a solution to India’s financial crisis. According to a report in the Indian Express, Wilson had a reliable presence in England because of his firm grasp on economic theory and policy, as well as his practical knowledge of commercial matters.
He is credited with presenting the financial budget based on the English model in India. Although Wilson’s budget was criticized for failing to take into account Indian conditions, it laid the foundation for how many economic institutions would operate in India in the future, especially income tax, the report said.
The huge increase in annual military expenditure reflects the crisis of the British Empire after the rebellion. Wilson resolved to make major institutional changes as a member of the Indian Finance Committee and expressed the hope of ensuring the impact of economic principles in India’s financial management.
Wilson’s major proposals included taxing the trading classes, issuing a government paper currency, reforming the financial system with budgeting, estimating and auditing, establishing a civilian police force, and a department for public works and roads. He is also credited with establishing a military finance commission as well as a civil finance commission.
In his budget, he imposed three types of taxes: Income Tax, License Tax and Tobacco Tax. However, only the first was approved, as the other two were withdrawn at the request of the Governor-General of India, Charles Canning.
Independent India’s first budget
Independent India saw its first budget on November 26, 1947, when it was presented by RK Shanmukham Chetty, the first finance minister of independent India.
Chetty was a politician, industrialist and lawyer. Before becoming the Finance Minister of India, he was the Speaker of the Central Legislative Assembly from 1933 to 1935. From 1935 to 1941, he served as the Diwan of the Kingdom of Cochin.
The Union Budget presented in November 1947 did not include any tax proposals, and the total revenue was estimated at Rs 171.15 crore. The fiscal deficit was estimated at Rs 24.59 crore. On the last working day of February, Chetty presented the budget in a briefcase at 5 pm.
“Our economy is more balanced than that of most countries and, despite the setbacks resulting from partition, our large natural resources and strong financial position will enable us to launch a vigorous economic plan to substantially raise the living standards of our people.” ” Chetty said in his speech before presenting the budget.
According to the data on the website of the Department of Economic Affairs, the budget statement of 1947 covered a period of seven and a half months from August 15, 1947 to March 31, 1948. Its target was revenue of Rs 171.15 crore. ,
John Mathai’s catchy budget speech
Chetty was replaced by John Mathai, who gave the most candid budget speech in 1949–50, opting not to read all the details and instead informed the members that a white paper was being circulated with all the details. He then made a brief presentation on inflation and economic policy. It was the first budget for a truly united India, as it included the financial statements of the former princely states, and required the formation of a planning commission and five-year plans, a report by the Economic Times states.
CD Deshmukh’s Humanitarian Approach
Mathai was replaced by CD Deshmukh, who was also the first Indian governor of the Reserve Bank of India. He presented the interim budget for the financial year 1951-52. The first general elections after independence were held between December and February 1952. After the new ministry took over, Deshmukh was given the finance portfolio.
Hindi was included in the budget documents starting in 1955-56. Deshmukh’s management of the country’s finances was characterized by prudence and humanitarian approach. He provided the much needed vision to deal with the changing financial needs of India as a young, independent and underdeveloped country.
He made a significant contribution to the development and implementation of the First and Second Five Year Plans of the country, which laid a solid foundation for the years to come. He was in charge of ensuring social control of the financial structure, such as enacting a new Companies Act and nationalizing the Imperial Bank of India and life insurance companies. A report said that he resigned from the Union Cabinet in protest against the separation of Mumbai from Maharashtra.
No ‘Spouse Allowance’
Morarji Desai is the only finance minister to have presented the highest number of budgets so far – eight annual and two interim. Desai’s 1968 budget abolished the stamping and valuation of goods by the excise department at the factory gate. To promote manufacturing, he introduced a self-assessment system for the manufacturers. The reforms reduced the administrative burden of the Excise Department.
In his 1968 budget, he abolished the “spouse allowance” for married couples who both paid income tax. In his budget speech, he said, “It would be unfair for any outsider to decide who is dependent on whom… to put an end to this unexpected tension. On the relationship of marriage.” Desai resigned in 1969 to protest the Nationalization of Major Banks ordinance. He believed that social control of banks would govern their operations and hold them accountable.
‘I appreciate the budget for the approval of this House now’
The Union Budgets 1975-76 and 1976-77 were presented by C Subramaniam. They cast as wide a net as possible to increase revenue through excise duty.
C Subramaniam is also the first recorded FM to end his speech with the words, “I appreciate the budget for the approval of this House now.” The typical way to end a budget is something along these lines. He was also the first Chidambaram to hold the post – hence the ‘C’ in his name.
Manmohan Singh served as the Governor of the Reserve Bank of India in the late 1980s and was appointed Finance Minister by Prime Minister Narasimha Rao in 1991. In July 1991, he presented the final budget for 1991–1992. The interim and final budget was presented for the first time by two ministers from opposing political parties. Manmohan Singh’s next four annual budgets were different from those of his earlier budgets.
Singh and Rao’s economic liberalization package opened up the country to foreign direct investment and reduced the red tape that had previously stunted business growth. Liberalization was prompted by a severe balance of payments crisis in which the Indian government was unable to meet its obligations and began preparations to pledge its gold reserves to the Bank of England to obtain the cash reserves needed to run the country. ,
Manmohan Singh’s 1991 budget speech made no effort to hide the gravity of the economic crisis that was present at the time.
“The new government, which took office barely a month ago, inherited an economy in deep trouble. The balance of payments position is precarious… We are on the verge of an even greater crisis since December 1990 and since April 1991… The people of India are facing double digit inflation which affects most of the poor sections of our society. inflicts damage. In short, the crisis in our economy is both acute and deep. We have never experienced anything like this in the history of independent India.”
Even before 1991, the Indian economy experienced fiscal, inflationary and balance of payments crises. Where the 1991 budget differed, it was in its determination to implement comprehensive policy reform.