THE CENTRAL BUDGETS
IN RETROSPECT
When Shri Jaswant
Singh rises to present the country’s annual budget for 2003-2004
on February 28, 2003 it will be the seventieth occasion when the
Union Finance Minister will be seeking Parliament’s permission
to defray expenses from the Consolidated Fund of India. The budget
broadly reveals measures to augment the Fund besides underlining
the projected performance of the economy in the coming fiscal.
Since Independence,
India’s annual budgets have been presented on 54 occasions. There
were interim budgets on eleven occasions while four times special
leave was sought to levy fresh taxes.
Although Shri
Jaswant Singh is the 25th holder of the office, he will be the
23rd Finance Minister to present the budget. The other two - K.C.
Neogy and H.N. Bahuguna – held office for such short durations
in between two budget days that they had no occasion to present
a budget. Even Shri Jaswant Singh did not get an opportunity to
present a budget when he was Finance Minister in the first Vajpayee
Government which was in office for a very short duration in May
1996.
Flashback
On November 26,
1947 R.K. Shanmukham Chetty had presented the first budget of
Independent India. But actually it was a review of the economy
and no new taxes were proposed as the budget day for 1948-49 was
just 95 days away.
In an explanation
he had said that the budget for April 1946 to March 1947 was adopted
by the then interim Government in March 1946. But that budget
was for undivided India and as the budget for 1947-48 passed by
the legislature had ceased to be operative with the division of
the country it was felt that it would be in accordance with the
public wish if a budget be placed before the representatives of
the people at the earliest possible moment.
Chetty began
his budget speech for 1948-49 saying "when I presented my
interim budget for free India’s Parliament a few months back…"
From then onwards an interim budget began to mean a budget for
a short period. Chetty resigned a few days later due to differences
with Prime Minister Nehru.
K.C. Neogy then
took charge of the Finance portfolio and held that office for
just 35 days.
John Mathai became
the third Finance Minister of India. He presented two budgets
for 1949-50 and 1950-51.
While presenting
the budget for 1950-51, the first budget for the Republic of India,
he announced the formation of the Planning Commission. But later
he resigned as he felt that the Planning Commission was becoming
a super cabinet.
The next Finance
Minister, C.D. Deshmukh, incidentally the first Indian Governor
of the Reserve Bank of India as well, presented an interim budget
for 1951-52. The First General Elections were held between December
and February 1952.
Deshmukh was
given the Finance portfolio after the new ministry assumed office.
He felt honoured to present the first budget in the first elected
Parliament on the basis of adult franchise.
Budget papers
began to be prepared in Hindi from 1955-56.
Deshmukh resigned
following his differences with the recommendations of the States’
Reorganisation Commission and formation of a bigger bilingual
Bombay State.
T.T. Krishnamachari
took over from him. He found that the calculations made in the
budget for 1955-56 had gone awry. So on November 30, 1956 in a
five-thousand-word speech he described the changed economic situation
and underlined the need to levy fresh taxes even before the next
budget was presented.
The Second General
Elections were held in February-March 1957 and he presented an
interim budget for 1957-58 on March 14, 1957 and the final budget
for 1957-58 subsequently.
T.T. Krishnamachari
resigned in Feburary 1958 amidst controversies. The then Prime
Minister, Jawaharlal Nehru, himself took charge of the Finance
portfolio and presented the budget for 1958-59.
In the opening
para of his budget speech Nehru had said … "According to
custom, the budget statement for the coming year has to be presented
today (February 28, 1958). By an unexpected and unhappy chain
of circumstances the Finance Minister, who would normally have
made this statement this afternoon is no longer with us. This
heavy duty has fallen upon me almost at the last moment."
Morarji Desai
became the next Finance Minister and he presented the maximum
number of budgets so far- ten. They included five annual and one
interim budgets during his first stint and three final and one
interim in the second tenure when he was both Finance Minister
and Deputy Prime Minister.
His annual budgets
were for the years from 1959-60 to 1963-64 and the interim budget
for 1962-63. The third General Elections were held in February
19, 1962.
The annual budgets
for three years 1967-68 to 1969-70 and the interim budget for
1967-68 were also presented by him. The interim budget for 1967-68
was on account of the General Elections in March 1967.
Morarji Desai
was the only Finance Minister to have had the opportunity to present
two budgets on his birthday – in 1964 and 1968. He was born on
February 29. Desai resigned in July 1969 in protest against the
nationalization of major banks by an ordinance on a Saturday evening.
He felt social control of banks was enough.
After the first
stint of Morarji Desai, T.T. Krishnamachari once again became
the Finance Minister for the second time. He presented the budgets
for 1964-65 and 1965-66. But twenty three weeks after presenting
the budget for 1965-66 on August 19, 1965 he told Parliament that
"…there are occasions when even a year’s interval becomes
too long for initiating remedial action to deal with emergent
situations" and sought permission to levy new taxes.
He resigned in
late 1966. He introduced, among other things, the voluntary disclosure
of concealed income scheme. What was deemed to be a one-time measure
came to be repeated in later years as well.
Sachindra Choudhuri
presented the budget for 1966-67. After the fourth General Elections
in 1967, Morarji Desai once again became the Finance Minister.
This was his second stint.
After he resigned,
Indira Gandhi, the then Prime Minister, took over the Finance
portfolio. So far, she has been the only woman Finance Minister.
Following the
Fifth General Elections in March, 1971 Y.B. Chavan became the
Finance Minister. He presented the interim budget for 1971-72
and the final budgets for four years – 1971-72 to 1974-75.
C. Subramaniam
presented the budgets between 1975-76 and 1976-77. He cast the
widest net to increase revenue through excise.
After the Seventh
General Elections in March 1977, the first non-Congress Ministry
under the then Janata Party assumed office.
H. M. Patel held
the Finance portfolio. He presented the interim budget for 1977-78.
In the shortest ever interim budget speech in just 800 words he
said …"the annual financial statement prepared by the outgone
Congress Ministry will serve the limited purpose of fulfilling
a constitutional requirement for taking a vote-on-account before
March 31, 1977. He presented the annual budget for 1978-79.
The budget for
1979-80 was presented by Chaudhary Charan Singh who was also Deputy
Prime Minister.
After the seventh
General Elections in January, 1980 the Congress Party returned
to power. Shri R. Venkataraman presented the interim and final
budgets from 1980-81 and the annual budget for 1981-82. Later
he rose to become the country’s Vice President and President.
Shri Pranab Mukherjee
presented the annual budgets for 1982-83, 1983-84 and 1984-85.
He was the first Rajya Sabha member to hold the Finance portfolio.
After the Eighth
General Elections in 1984, Shri V.P. Singh presented the annual
budgets for 1985-86 and 1986-87. There was no interim budget since
the elections were held in December 1984.
Rajiv Gandhi
presented the budget for 1987-88. He was the third Prime Minister
to present a budget after his mother, and grand father. The exercises
in zero-based budget began in 1987-88.
The zero-based
budgeting is a process of review, analysis and evolution for each
budget request in order to justify its inclusion or exclusion
from the integrated whole budget before it is finally approved.
In India the
zero-based budgeting was implemented in three phases – one third
in the first year, two thirds in the second year and fully from
the third year. It is a continuous process.
Shri N.D. Tiwari
presented the budget for 1988-89 and S.B. Chavan for 1989-90.
After the General
Elections in November 1989, the then Janata Dal Government’s Finance
Minister, Shri Madhu Dandavate presented the annual budget for
1990-91.
Following subsequent
political developments in that year Shri Yashwant Sinha became
the Finance Minister and presented the interim budget for 1991-92.
In the election
held in May 1991, the Congress returned to power and Shri Manmohan
Singh became the Finance Minister. He presented the final budget
for 1991-92 in July 1991.
This was the
first occasion when the interim and final budgets were presented
by two ministers of two different political parties.
The next four
annual budgets of Shri Manmohan Singh had an orientation different
from the one followed till then. He opened the economy, encouraged
foreign investments and reduced the peak import duty from 300
plus to 50 per cent. He will be remembered best for making the
rupee convertible in current account in just two phases.
Shri Manmohan
Singh introduced the concept of service tax. He said in his 1994-95
budget speech that over the years the tax base had been widened
for direct domestic tax. But the services which accounted for
forty per cent of the gross domestic product (GDP) remained untouched.
So he levied service tax on just three services – telephones,
non-life insurance and stock brokers. It was at five per cent.
Three more services were added in the next budget. But both Shri
P. Chidambaram and Shri Yashwant Sinha expanded the list. Presently
48 services are taxed and the burden is passed on to the users.
Shri Singh presented the interim budget for 1996-97 as elections
were slated for May 1996.
After the elections
another non-Congress ministry assumed office. So, a final budget
for 1996-97 was presentedby Shri P. Chidambaram of the then Tamil
Maanila Congress. It was the second time that an interim and final
budgets were presented by two ministers of different political
parties.
Following a constitutional
crisis the I.K. Gujral Ministry was on its way out and a special
session of Parliament was convened only to pass Shri Chidambaram’s
1997-98 budget. It was passed without a debate.
After the General
Elections in March 1998, Shri Yashwant Sinha got the Finance portfolio
in the Vajpayee Ministry. He presented the interim and final budgets
for 1998-99. After the 13th General Elections in 1999, he became
the Finance Minister once again. He had presented four annual
budgets – from 1999-2000 to 2002-2003.
Shri Yashwant
Sinha presented the budget for 1999-2000 in the forenoon. Earlier
the budgets used to be presented at five in the evening on the
British pattern, since 5 p.m. in India is 1.30 a.m. in London.
While Shri Manmohan
Singh concentrated on import duty, Shri Sinha paid great attention
to rationalization of excise and reduced the slabs from 11 to
one.
The nation eagerly
awaits Shri Jaswant Singh’s budget for 2003-2004.
Inputs
from : K. Viswanatha Rao, Freelance Journalist
