Finance Minister Nirmala Sitharaman will present her fourth straight Union Budget on Tuesday (February 1). The Finance Minister will present financial statements and tax proposals for the fiscal year 2022-23 in Parliament. The Union Budget will be presented by the Indian Finance Minister in paperless form and the traditional ‘halwa ceremony’ was not observed in the lead-up to the budget preparation this year.
While FM Sitharaman holds the record for delivering the longest speech (2 hours and 42 minutes), ex-finance minister Hirubhai Mulljibhai Patel had delivered the shortest speech of the Indian budget in 1977. Over the years, the tradition of presenting the budget has recorded a plethora of interesting and historical changes that have impacted the nation’s economy in the most significant fashion. With Union Minister Sitharaman gearing up to present the Budget 2022-2023, let’s take a quick look at some of India’s most iconic budgets.
Once-in-a-Century Budget: On February 1 last year, FM Sitharaman termed the union budget of 2021 as ‘once-in-a-century budget’. Depending on an aggressive privatisation strategy and robust tax collections, the Sitharaman-presented ‘once-in-a-century budget’ was aimed at reviving Asia’s third-largest economy through investing in infrastructure and healthcare.
Rollback Budget: The budget for 2002-2003 was presented by Yashwant Sinha during the NDA government reign. The budget for the Atal Bihari Vajpayee-led NDA government is known as Rollback Budget. Several proposals of the 2002-03 budget were either withdrawn or rolled back.
Millennium Budget: The Millennium Budget was presented by Yashwant Sinha in 2000. Sinha’s Millennium Budget presented the road map for the growth of India’s Information Technology (IT) industry. The Millennium Budget discontinued the practices of incentives on software exporters. The 2000 budget also reduced customs duty on computer and computer accessories.
Dream Budget: Using the Laffer Curve principle to lower tax rates in order to increase collections, P Chidambaram presented the budget that became ‘everyman’s budget dream’ in 1997-98. Reducing corporate tax rate and cutting down personal income tax rates from 40% to 30%, Chidambaram’s Dream Budget also encouraged higher investment from Foreign institutional investors (FIIs).
Epochal Budget: Manmohan Singh’s iconic budget in 1991 brought an end to the licence raj and it also kickstarted the era of economic liberalisation. Singh’s Epochal Budget was presented in the Parliament when India was on verge of suffering an economic collapse. Taking essential steps to promote exports, Singh’s landmark budget also reduced customs duty from 220 percent to 150 percent at the time.
Carrot & Stick Budget: The PV Narasimha Rao government ended the licence raj in 1991 and the initial steps to demolish the system were taken when VP Singh presented the Union budget in 1986. The union budget presented by Singh for the Congress government on February 28 is known as the Carrot and Stick’ budget. The rewards and punishment budget introduced MODVAT (Modified Value Added Tax). It also launched a drive against smugglers, black marketers, and tax evaders.
The Black Budget: Presented by Yashwantrao B Chavan under the Indira Gandhi government, the 1973-74 budget was called the Black Budget because the fiscal deficit during that year was INR 550 crore. The nation was embracing major financial distress at the time.
New Delhi: Finance Minister Nirmala Sitharaman will on February 1 present her fourth straight Union Budget when she presents financial statements and tax proposals for the fiscal year 2022-23 (April 2022 to March 2023).
Here are some budget trivia:
INDIA’S FIRST BUDGET: The Budget was first introduced in India on April 7, 1860, when Scottish economist and politician James Wilson from East India Company presented it to the British Crown. Independent India’s first budget was presented on November 26, 1947, by the then Finance Minister R K Shanmukham Chetty.
LONGEST BUDGET SPEECH: Sitharaman holds the record for delivering the longest speech when she spoke for 2 hours and 42 minutes while presenting the Union Budget 2020-21 on February 1, 2020. With two pages still remaining, she had to cut short her speech as she felt unwell. She asked the Speaker to consider the remaining part of the speech as read.
During the course of this speech, she broke her own record of July 2019 – her maiden Budget – when she had spoken for 2 hours and 17 minutes.
MOST WORDS IN BUDGET SPEECH: At 18,650 words, Manmohan Singh delivered the longest Budget speech in terms of words in 1991 under the Narasimha Rao government. In 2018, then finance minister Arun Jaitley’s speech with 18,604 words was the second-longest in terms of word count. Jaitley spoke for 1 hour and 49 minutes.
SHORTEST BUDGET SPEECH: 800 words was all that the then finance minister Hirubhai Mulljibhai Patel delivered in 1977.
MOST NUMBER OF BUDGETS: Former Prime Minister Moraraji Desai holds the record of presenting the most number of budgets in the history of the country. He had presented 10 budgets during his stint as finance minister during 1962-69, followed by P Chidambaram (9), Pranab Mukherjee (8), Yashwant Sinha (8), and Manmohan Singh (6).
TIME: Until 1999, the Union Budget was presented at 5 pm on the last working day of February as per British era practice. Former Finance Minister Yashwant Sinha in 1999 changed the budget presentation timing to 11 am.
Arun Jaitley started presenting the Union Budget on February 1 in 2017, departing from the colonial-era tradition of using the last working day of that month.
LANGUAGE: Until 1955, the Union Budget was presented in English. However, the Congress-led government later decided to print the Budget papers in both Hindi and English.
PAPERLESS: Covid-19 pandemic turned the Budget for 2021-22 was paperless – a first in Independent India.
FIRST WOMAN: In 2019, Sitharaman became the second woman to have presented the budget after Indira Gandhi, who had presented the budget for the financial year 1970-71. That year, Sitharaman did away with the traditional budget briefcase and instead went for a traditional ‘bahi-khata’ with the National Emblem to carry the speech and other documents.
RAILWAY BUDGET: Till 2017, Railway Budget and Union Budget were presented separately. After being presented separately for 92 years, the Railway budget was merged in the Union Budget in 2017 and presented together.
PRINTING: Till 1950, the budget was printed at Rashtrapati Bhavan till it got leaked and the venue of printing had to be shifted to a press at the Minto Road in New Delhi. In 1980, a government press was set up in the North Block – the seat of the finance ministry.
ICONIC BUDGETS:
The Black Budget: The 1973-74 Budget presented by Yashwantrao B Chavan in the Indira Gandhi government was called the Black Budget as the fiscal deficit during that year was Rs 550 crore. It was a time when India was going through acute financial distress.
Carrot & Stick Budget: The Union budget presented by VP Singh for the Congress government on February 28, 1986, was the first step towards dismantling license raj in India. It was called the ‘Carrot and Stick’ budget as it offered both rewards and punishment. It introduced MODVAT (Modified Value Added Tax) credit for lowering the cascading effect of tax that consumers had to pay while also launching an intense drive against smugglers, black marketers, and tax evaders.
Epochal Budget: Manmohan Singh’s landmark 1991 budget under the PV Narasimha Rao government that ended licence raj and began the era of economic liberalisation, is known as the ‘Epochal Budget’. Presented at a time when India was on the brink of an economic collapse, it among other things slashed customs duty from 220 per cent to 150 per cent and took steps to promote exports.
Dream Budget: P Chidambaram in the 1997-98 budget used the Laffer Curve principle to lower tax rates to increase collections. He slashed the maximum marginal income tax rate for individuals from 40 per cent to 30 per cent and that for domestic companies to 35 per cent besides unleashing a number of major tax reforms including voluntary disclosure of income schemes to recover black money. Referred to as the ‘Dream Budget’, it also slashed customs duty to 40 per cent and simplified the excise duty structure.
Millennium Budget: Yashwant Sinha’s Millennium Budget in 2000 laid the road map for the growth of India’s Information Technology (IT) industry as it phased out incentives on software exporters and lowered customs duty on 21 items such as computer and computer accessories.
Rollback Budget: Yashwant Sinha’s 2002-03 budget for the NDA government headed by Atal Bihari Vajpayee is popularly remembered as the Rollback Budget as several proposals in it were withdrawn or rolled back.
Once-in-a-Century Budget: Nirmala Sitharaman on February 1, 2021, presented what she called was a ‘once-in-a-century budget’ as it looked to revive Asia’s third-largest economy via investing in infrastructure and healthcare while relying on an aggressive privatisation strategy and robust tax collections.
