What was the first Union Budget of independent India like?
The Union Budget of India for the year 2023-2024 was announced yesterday by Finance Minister Nirmala Sitharaman. According to her, the budget was made keeping in mind the overall development of the Indian economy with respect to the rest of the world. The highlights of the budget are increasing the personal income tax slab from INR 5 lakh and above to INR 7 lakh and above. Focus has been on inclusive development, infrastructure development, start-up culture, capital investment, youth power, generating more jobs and growth of the green sector. Some of the things that will become more expensive include gold and silver, kitchen appliances, and imported automobiles among others. In contrast, buying mobile phones and eating out will be cheaper.
With the Union Budget high on the radar of everyone, here’s a brief history of budget in India.
Budget in pre-independent India
If you always considered that it was independent India that had its first union budget, it’s far from truth. In fact, the idea of budget was first presented in India in April 1860 by the East India Company. However, it took another nine years to come up with the first ever full-fledged Indian Budget in February 1869, thanks to Scottish businessman, economist and liberal politician Mr. James Wilson. He was the Finance Head of the Indian Council that was responsible for advising the Viceroys. The world however better remembers the man as the founder of the Standard Chartered Bank and the media group The Economist.
First budget of independent India
From 1869 to 1946, the East India Company along with the British Crown, presented each year’s budget in India. Needless to say, they were made keeping in mind the profits and conveniences of the colonisers. Later, on 26th November 1947, the first Finance Minister of independent India, Sir RK Shanmukham Chetty, announced the first official budget. Chetty was an industrialist as well as the Diwan of Cochin and the Constitutional Advisor to the Chamber of Princes. Unfortunately, the first budget of independent India happened amidst the partition and riots and didn’t really include many changes.
Budget of the Republic of India
The first government of independent India made a decision to change the Finance Minister as soon as India became a Republic in 1950. Chetty was succeeded by Mr. John Mithai. He delivered the first proper budget of united India in November 1950 that comprised of detailed financial statements to be followed by former Princely States, proposed the need for having five-year contingency plans and above all introduced the Planning Commission. Mithai even started the tradition of circulating the copies of the White Paper that contained the entire budget with everyone in the Parliament and then giving the Budget Speech, alongside a brief lecture on important economic policies and inflation.