Mumbai: The Union Budget of India is also referred to as the Annual Financial Statement as per Constitution of India. It consists of the statement of Incomes and Expenses for the Government. Looking at it from a very basic point of view, it may be comparable with an Individual’s budget for his monthly income and spendings, except that the Government Budget is for a year and is at a macro level and scale is gigantic.
1) History –
The first Budget of Independent India was presented by the then Finance Minister RK Shanmukham Chetty on November 26, 1947 with total revenues of meagre Rs. 171.15 crore and a paltry Rs 204.59 crores fiscal deficit.
It is worthy to note that the budget was presented amid riots post separation while India and Pakistan shared the same currency till September 1948.
2) Halwa Ceremony –
Union Minister for Finance Arun Jaitley at the halwa ceremony to mark the commencement of budget printing process for Union Budget 2018. PTI Photo/ PIB |
Something on the lines of ‘Kuch meetha ho jaye’ as per famous advertorial by ‘Cadbury’ which depicts the Indian tradition to have sweets before starting some good deed. The North Block follows the ‘Halwa Ceremony’ before printing the Budget documents which are later presented in the Parliament in around a week. Halwa is also served by the Finance Minister.
Halwa ceremony marks the starting point of printing of the budget documents. The ceremony is held at the North Block. It is prepared in large quantities and served to the officers and support staff involved directly in the Budget making and printing process.
For the period leading up to presentation of budget by the minister in the Parliament, the officers and staff remain completely isolated and stay in the North Block office in the ministry and remain cut off from their families. No contact can be made by them or to them even by their family members, except only very senior officials in the Finance Ministry are permitted to go home.
3) Who presented the Budgets – how many times?
Most annual budgets presented by far in the capacity of Finance Minister are as below –
Morarji Desai – 10 budgets
P. Chidambaram – 9 budgets
Pranab Mukherjee- 8 budgets
Yashwant Sinha, Yashvantrao Chavan and C.D. Deshmukh – 7 budgets each
Manmohan Singh and T.T. Krishnamachari – 6 budgets each.
4) Vote on Account/ Interim Budget –
PTI Photo / TV GRAB |
An interesting fact about budget in the election year is that it is either a ‘Vote on Account’ or an ‘Interim Budget’. The outgoing government may not want to put a burden on the incoming government for any tax proposals/ structural changes made in the budget not acceptable to the incoming government. However, the government may need to withdraw funds for its operational functioning such as payment of salaries, rents, etc. Such withdrawal is often made from the consolidated fund by means of an ‘interim budget’ or a ‘vote on account’.
While a ‘Vote on Account’ is essentially a presentation of budgeted expenditures for the government, on the other hand, ‘Interim Budget’ is a complete set of accounts including both expenditures and receipts. It is very similar to a Full Budget, however Governments usually prefers not to introduce structural Tax changes in these budgets ahead of elections.
5) Time of Budget announcement –
For as late as the year 1999, the Union Budget was announced at 5:00 pm on the last working day of the month of February. Colonial Era was one such reason for late presentation. Another practical reason being, budgets usually raised taxes. Presentation in the evening gave various stakeholders, night to work out the change in prices. Yashwant Sinha, the then Finance Minister of India changed the ritual by announcing the 1999 Union Budget at 11 am, the new ritual thus continued.
