With Union Budget 2019 round the corner, here are 10 most interesting budgets that have shaped India and its finances in some way or the other.
1947: Independent India's First Budget by R K Shanmukham Chetty
The decision to present a budget itself in seven and a half months of our Independence was historical. With the Partition of India and the emergence of two independent governments, the Budget for 1947-48 passed by the Legislature the previous March ceased to be operative. New Delhi felt that the newly-freed country would like a budget to be presented at the earliest.
1951: First Budget of the Republic of India by John Mathai
This budget laid down the roadmap for the creation of the Planning Commission. The Commission was entrusted with the responsibility of formulating phased plans for effective and balanced use of resources. High inflation, increased cost of capital, low level of savings and thus low level of investment and production had marked the years following Independence. A large part of the blame or the credit for the Indian growth model goes to the Planning Commission.Convention was broken in this budget. A White Paper containing all the material set out in a 'normal' budget speech was presented along with the Explanatory Memorandum.
1957 Budget by Tiruvellore Thattai Krishnamachari
This budget put severe restrictions on imports through an import licensing system; withdrew budgetary allocation for non-core projects, set up Export Risk Insurance Corp to protect exporters against payment risks. It also brought in wealth tax, a tax on expenditure and a tax on railway passenger fee and raised peak excise to 400 per cent. First attempt to distinguish between active income (salaries or business) and passive income (interest or rent) was made in this budget. The import curbs and high tax rates made things worse. Raising external debt became increasingly difficult.TTK played a big role in setting up of Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, Unit Trust of India, Damodar Valley Corporation and Neyveli Lignite projects.
1968: People Budget by Morarji Ranchhodji Desai
He ended the requirement of stamping and assessment by the Excise Department authorities of goods right at the factory gate and introduced the system of self-assessment by all big and small manufacturers, a system still in use. Today, except for some goods such as cigarettes and alcoholic preparations most products are on the self-removal mode for the levy of excise duty.Self-removal of goods was a major procedure relaxation that went a long way in boosting manufacturing. Administrative convenience in removal of goods made the process less complicated and tedious.Desai is the only finance minister to have presented the budget on his birthday and the only Union finance minister to have presented 10 budgets.
1973: The Black Budget By Yashwantrao B Chavan
This budget got the black budget name due to the high budget deficit, which at the time was Rs 550 crore. In this budget, Chavan allocated Rs 56 crore for nationalisation of coal mines, general insurance companies and Indian Copper Corp. In the years to come, it is argued, the decision had an adverse impact on the productivity of India’s coal production and led to huge dependence on imports to meet domestic demands.
1987: The Gandhi Budget by Rajiv Gandhi
This introduced provisions related to minimum corporate tax, better known today as MAT or Minimum Alternate Tax. The budget estimates for collections of this tax were modest (Rs 75 crore) but it has since become a major source of revenue, though the figures are no longer revealed.The idea was inspired by the United States.
1991: The Epochal Budget By Manmohan Singh
The budget was presented amid the Indian economic crisis, which marked the beginning on economic liberalisation. Manmohan Singh, under the Narasimha Rao government, overhauled the import-export policy and took measures to make Indian economy more global trade friendly. The customs duty was slashed from peak 220 per cent to 150 per cent and steps were taken to promote exports. India in the next two decades turned out to become one of the fastest growing emerging economies in the world.
1997: Dream Budget by P Chidambaram
It made significant changes to bring down personal income tax and corporate tax. Chidambaram brought down the highest personal income tax rate from 40% to 30%, did away with many surcharges and slashed royalty rates. The lower tax rates helped increase compliance and were welcomed by common people.
2000: The Millenium Budget by Yashwant Sinha
It is said to have revolutionised India’s Information Technology (IT) sector. In this budget, Sinha phased out Manmohan Singh’s incentive on software exporters, which was hailed as a courageous decision by policy experts. His decision to phase out incentives coupled with lower customs duty on 21 items, including computers and CD Roms, for the IT sector, led to the growth of the sector.
2002: Roll-Back Budget by Yashwant Sinha
The budget presented by Yashwant Sinha became popular as Roll-Back Budget as he, later, rolled-back several of his proposals from service tax to hike in LPG prices under pressure from the opposition.
(With inputs from online media reports)
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