India Budgets history

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1947: The First Budget

Finance Minister: R K Shanmukham Chetty

Independent India’s first budget

Presented in November 1947

Concentrated on agriculture

Over the next decade focus to move to expansion of

industrial sector

Forestry, fishing and textile identified as focus areas

1950 : The Agriculturist’s Budget

·    Finance Minister: C D Deshmukh

Proposed a ‘Grow More Food’ Plan

Nehru’s vision to push agriculture via assured irrigation

Plan to meet the growing demand as population expanded

Economic growth from Grow More Food Plan helped only in short term

1969: Bank Nationalization

Finance Minister: Morarji Desai

14 banks were nationalize.

Became mandatory for banks to provide 40% of net credit to priority sectors

Priority sectors: agriculture, small-scale industry, retail trade, small businesses

Aim for nationalization: Ensure that banks fulfill social and developmental goals

Budget in the 60s focused on public finance, savings, taxation and inflation

Aim was to secure a balance between consumption and investment on resources and increase exports.

1970: Garibi Hatao

·        Finance Minister: Indira Gandhi

Budget presented by India’s first woman Finance Minister

Indira Gandhi’s claimed, “the weaker sections are the

greatest source of economic strength”.

Proposed “anti-poverty programmes”

Introduced special schemes and discretionary transfers

Sought to combine social welfare expenditure & growth potential

Set the economy on the irreversible path of high spending by central government

Revenue surplus turned into a revenue deficit

Budget 1986: Cheers for Tax Reform

·         Finance Minister: VP Singh

·         Launched long-term program for tax reform

·         Excise policy saw a major overhaul.

·         Fiscal Policy was designed to widen tax base

·         Introduced modified value added tax or MODVAT

·         MODVAT allowed manufacturers to obtain instant and full reimbursement of excise duty paid on components and raw materials

1992: Rise of a New India

·         Finance Minister: Manmohan Singh

·         The budget that changed the rules of the game

·         Introduced an inclusive economic strategy

·         Unveiled a new currency policy

·         Abolished license regime

·         New import-export policy opened up the economy for FDI

·         Foreign investment limit in high-priority industries was raised to 51%

·         Interest rates were made flexible

·         Commercial banks were allowed to set interest rates based on risk on loans

·         The private sector emerged as the star gainer.

·         Opportunities and scope of expansion of private sector increased manifold

·         The 1992 Budget changed the way the world viewed India

1997: The Dream Budget

·         Finance Minsiter: P Chidambaram

·         Budget presented a road map for economic reforms

·         A slew of measure both on the direct and indirect tax front changed India’s tax landscape

·         Maximum income tax rate for individuals was cut from 40% to 30%

·         Income tax rate for companies was decreased to 35% per from 40%

·         Peak customs duty came down to 40% from 50%

·         Dividend tax on individual investors was abolished.

·         This budget introduced the Voluntary Disclosure of Income Scheme, which targeted recovery of black money.

·       Tax filing was made mandatory based on ownership of a telephone, four-wheeler, occupation of immovable property and foreign travel.

·         This budget known as the Dream Budget.

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