() Union budget of India
GovernmentGovernment of India
Websitewww.indiabudget.gov.in

The Union Budget of India, also referred to as the Annual Financial Statement in Article 112 of the Constitution of India,[1] is the annual budget of the Republic of India set by Ministry of Finance for the following financial year, with the revenues to be gathered by Department of Revenue to identify planned government spending and expected government revenue and the expenditures gathered by Department of Expenditure of the public sector, to forecast economic conditions in compliance with government policy.

The Government presents it on the first day of February so that it can be materialised before the beginning of new financial year in April. Until 2016 it was presented on the last working day of February by the Finance Minister in Parliament. The budget division of the Department of economic affairs (DEA) in the finance ministry is the nodal body responsible for producing the budget.[2]

It is presented by means of the Finance bill and the Appropriation bill has to be passed by Lok Sabha before it can come into effect on 1 April, the start of India's financial year.

In modern times, the budget has been broadcast live from Sansad Bhawan on the DD National, DD News and Sansad TV. It is hosted without interruption from 11:00 am to 1:00 pm, normally followed up with a report by a panel assessing the changes, benefits and flaws in the budget. Additional budget documents and materials are available on the government budget website and Union Budget Mobile app.

Rail Budget, presented separately for 92 Years has been merged with union budget.[3]

Since 1947, there have been a total of 73 annual budgets, 14 interim budgets and four special budgets, or mini-budgets.[4][5]

Traditions

Time of budget announcement

Until the year 1999, the Union Budget was announced at 5:00 pm on the last working day of the month of February. This practice was inherited from the colonial era. Actual agenda behind this tradition was that, it gives Britishers the time of 11:30 am, a relax time at their location. This clearly shows their colonial era mindset they had left on Indian politicians.Another reason was that until the 1990s, all that budgets seem to do was to raise taxes, a presentation in the evening gave producers and the tax collecting agencies the night to work out the change in prices.

It was Yashwant Sinha, the then Finance Minister of India in the NDA government (led by Bharatiya Janata Party) under Prime Minister Atal Bihari Vajpayee, who changed the ritual by announcing the 1999 Union Budget at 11 am.[6] The tradition started from 2001.

Date of budget announcement

Also again in 2017, departing from the colonial-era tradition of presenting the Union Budget on the last working day of February the then Minister of Finance (India) Arun Jaitley, in the NDA government (led by Bharatiya Janata Party) of Narendra Modi announced that it will now be presented on 1 February.[7]

Halwa ceremony

The Finance Minister Arun Jaitley at the Halwa ceremony to mark the commencement of Budget printing process

The printing of budget documents starts roughly one week ahead of presenting in the Parliament with a customary 'Halwa ceremony' in which Halwa (a sweet dish) is prepared in large quantities and served to the officers and support staff involved. They remain isolated and stay in the North Block office until the Budget is presented. The halwa is served by the Finance Minister. This ceremony is performed as a part of the Indian tradition of having something sweet before starting an important work.[8]

Lock-In Period

Union Finance Minister giving final touches from his desktop to the General Budget 2006-07.

‘Lock-in’ is a period of a number of days which exists to maintain the secrecy of the Budget. The Halwa ceremony begins the “lock-in” period of finance ministry staff in the Budget Press located in the ministry’s headquarters in the North Block. They can emerge only once the Finance Minister completes their Budget speech on 1 February.

Previously, this “lock-in” period – when officials cannot be in contact with the outside world – would be longer. Since 2021, however, the Budget has been presented in a purely digital format, and the lock-in period has gotten shorter.

The basement of North Block houses a printing press that was traditionally used to print budget documents for 40 years from 1980 to 2020. Thereafter, the budget went digital with bare minimum documents printed and the bulk distribution happening via mobile app or on the website.

Going digital also meant that the lock-in period has gotten shorter to just five days from the previous one that lasted up to two weeks.

Another tradition is the pre-budget speech of the President.[9] In picture the President being led in a ceremonial procession to the Central Hall of the Parliament to address the Budget Session, 2005.

Briefcase (discontinued)

Until 2018, as a part of tradition, Finance ministers carried the budget in a leather briefcase. The tradition was established by the first Finance minister of India, R. K. Shanmukham Chetty.

Bahi-Khata

Finance Minister with Digital Bahi-Khata

On 5 July 2019, Nirmala Sitharaman, broke the above tradition by carrying the budget in a Bahi-Khata.[10] On 1 February 2021, Finance Minister Nirmala Sitharaman presented the first paperless budget. She took a digital tablet wrapped in a tradition 'bahi-khata' style pouch. It is considered a move to strengthen Prime Minister Narendra Modi's ambitious Digital India mission.

FM called on President at the Rashtrapati Bhavan

FM handover the Union Budget to the President to get assent

As per established tradition, the Finance Minister meet the President at the Rashtrapati Bhavan to get assent from President before heading to the Parliament to present the Union Budget.

Cabinet Meeting in Sansad Bhawan

Cabinet Meeting in Sansad

A meeting of the Union Cabinet is held at 10a.m. on February 1 . After getting the nod from the cabinet, Finance Minister present the Union Budget in Parliament of India.

Post Budget Press Meet

The Union Minister for Finance and Corporate Affairs address a Post Budget Press Conference along with Ministers of State for Finance, Finance Secretary and all the other Secretaries of the Ministry of Finance to address the Media about announcements made during Budget speech and answer the queries

Post Budget Meeting

The Union Minister for Finance addressing the Central Board of Directors of the Reserve Bank of India in its customary post- budget meeting, in New Delhi

Finance Minister address the Reserve Bank of India's central board of Directors and highlight key points of the Union Budget and highlight key points of the Union Budget, including the fiscal consolidation roadmap and high capital expenditure plan. The finance minister also discuss the announcements made during the budget speech.

It is customary for the finance minister to address the Reserve Bank of India board after the budget.

Interim Budget

An interim budget is not the same as a 'Vote on Account'. While a 'Vote on Account' deals only with the expenditure side of the government's budget. An interim budget is a complete set of accounts, including both expenditure and receipts. An interim budget gives the complete financial statement, very similar to a full budget. While the law does not disqualify the Union government from introducing tax changes, normally during an election year, successive governments have avoided making any major changes in income tax laws during an interim budget.[11]

Difference between Interim Budget and Union Budget

An interim budget differs from a union budget in that it serves as a temporary financial plan for the government when elections are approaching. This budget seeks parliamentary approval for the government to cover expenses for the remaining months in its term. Unlike a Union budget, which outlines the entire year, an interim budget focuses on the transition period until the new government takes charge. While estimates are provided for the entire year, the incoming government can modify them when formulating a new budget. The interim budget also holds the power to make changes in the tax regime, but historically, major tax adjustments or new schemes are avoided due to the limited time in office. It essentially mirrors the first part of a union budget, detailing the previous year's income and expenses, with only essential expenses documented until the elections. Moreover, regulations from the Election Commission prevent any significant policy changes that could unfairly influence voters during this critical period.[12]

History Of Budget

Pre-liberalization

Dr. John Matthai, Finance Minister, Government of India has a final glance at the budget proposals before delivering his budget speech in the Parliament, in February 1949

The first union budget of independent India was presented by R. K. Shanmukham Chetty on 26 November 1947. Total revenues stood at ₹171.15 crore, and the fiscal deficit was ₹24.59 crore. The total expenditure was estimated at ₹197.29 crore with Defence expenditure at ₹92.74 crore.

The union budgets for the fiscal years 1959–61 to 1963–64, inclusive of the interim budget for 1962–63, were presented by Morarji Desai. On 29 February in 1964 and 1968, he became the only finance minister to present the Union budget on his birthday.[13] Desai presented budgets that included five annual budgets and an interim budget during his first term and three final budgets and one interim budget in his second tenure when he was both the Finance Minister and the Deputy Prime Minister of India. After Desai's resignation, Indira Gandhi, the then Prime Minister of India, took over the Ministry of Finance to become the first woman to hold the post of the Finance Minister.

Hirubhai M. Patel, presented the shortest budget speech for the interim budget of 1977, which was mere 800 words long.[14] Pranab Mukherjee, the first Rajya Sabha member to hold the Finance portfolio[clarification needed], presented the annual budgets for the financial years 1982–83, 1983–84 and 1984–85. Rajiv Gandhi presented the budget for 1987–89, after V. P. Singh quit his government, and in the process became the third Prime Minister to present a budget after his mother and grandfather. N. D. Tiwari presented the budget for 1988–89, S. B. Chavan for 1989–90, while Madhu Dandawate presented the Union budget for 1990–91. Dr. Manmohan Singh became the Finance Minister and presented the interim budget for 1991-92 as elections were forced. Due to political developments, early elections were held in May 1991 following which the Indian National Congress returned to political power and Manmohan Singh, the Finance Minister, presented the budget for 1991–92.

Post-liberalization

Manmohan Singh under P. V. Narasimha Rao, in his next annual budgets from 1992 to 1993, opened the economy,[15] encouraged foreign investments and reduced peak import duty from 300 plus percent to 50 percent. After elections in 1996, a non-Congress ministry assumed office. Hence the financial budget for 1996-97 was presented by P. Chidambaram, who then belonged to Tamil Maanila Congress. Following a constitutional crisis when the I. K. Gujral Ministry was on its way out, a special session of Parliament was convened just to pass Chidambaram's 1997-98 budget. This budget was passed without a debate. After the general elections in March 1998 that led to the Bharatiya Janata Party forming the Central Government, Yashwant Sinha, the then Finance Minister in this government, presented the interim and final budgets for 1998–99. After general elections in 1999, Sinha again became the Finance Minister and presented four annual budgets from 1999–2000 to 2002–2003. Due to elections in May 2004, an interim budget was presented by Jaswant Singh.

The Union Budget of India for 2012–2013 was presented by Pranab Mukherjee, on 16 March 2012, which was the 7th budget of his career. These budgetary proposals would be applicable for financial year 1 April 2012 to 31 March 2013. The Union Budget of India for 2013–2014 was presented by P. Chidambaram on 28 February 2013. The Interim Union Budget for 2014–2015 was presented on 17 February 2014.[16] The Union Budget of India for 2014–2019 was presented by Arun Jaitley.[17][18] The Interim Union Budget for 2019–2020 was presented by Piyush Goyal.[19] The Union Budget for 2019–2023 was presented by Nirmala Sitharaman.[20][21]

Finance ministers who have presented the budget

Timeline

Morarji Desai has presented 10 budgets which is the highest count followed by P Chidambaram's 9 and Pranab Mukherjee's 8. Yashwant Sinha, Yashwantrao Chavan and C.D. Deshmukh have presented 7 budgets each while Manmohan Singh and T.T. Krishnamachari have presented 6 budgets, Nirmala Sitharaman has presented 5 budgets.[4]

This list is incomplete; you can help by adding missing items. (February 2021)
Nirmala SitharamanArun JaitleyP. ChidambaramPranab MukherjeeP. ChidambaramJaswant SinghYashwant SinhaP. ChidambaramManmohan SinghMadhu DandavateShankarrao ChavanN.D.TiwariRajiv GandhiV. P. SinghPranab MukherjeeR. VenkataramanCharan SinghHirubhai M. PatelChidambaram SubramaniamYashwantrao ChavanIndira GandhiMorarji DesaiSachindra ChaudhuriT. T. KrishnamachariMorarji DesaiJawaharlal NehruT. T. KrishnamachariJawaharlal NehruC. D. DeshmukhJohn MathaiDr Aman Khan

Notes:
1During Deshmukh's tenure the Budget papers were prepared in Hindi as well for the first time.[22]
2Morarji Desai presented eight annual and two interim budgets.
[22]

List of Union Budgets

Sr. No Year Date Presented by
(Finance Minister)
Prime Minister Party
1 1947 - 48 26 November 1947 RK Shanmukham Chetty Jawaharlal Nehru Indian National Congress
2 1948 - 49 28 February 1948
3 1949 - 50 28 February 1949 John Mathai
4 1950 - 51 28 February 1950
5 1951 - 52 28 February 1951 C. D. Deshmukh
6 1952 - 53 (Interim) 29 February 1952
7 1952 - 53 23 May 1952
8 1953 - 54 27 February 1953
9 1954 - 55 27 February 1954
10 1955 - 56 28 February 1955
11 1956 - 57 29 February 1956
12 1957 - 58 (Interim) 19 March 1957 T. T. Krishnamachari
13 1957 - 58 15 May 1957
14 1958 - 59 28 February 1958 Jawaharlal Nehru (Prime Minister)
15 1959 - 60 28 February 1959 Morarji Desai
16 1960 - 61 29 February 1960
17 1961 - 62 28 February 1961
18 1962 - 63 (Interim) 14 March 1962
19 1962 - 63 23 April 1962
20 1963 - 64 28 February 1963
21 1964 - 65 29 February 1964 T. T. Krishnamachari
22 1965 - 66 27 February 1965 Lal Bahadur Shastri
23 1966 - 67 28 February 1966 Sachindra Chaudhuri Indira Gandhi
24 1967 - 68 (Interim) 20 March 1967 Morarji Desai
25 1967 - 68 25 May 1967
26 1968 - 69 29 February 1968
27 1969 - 70 28 February 1969
28 1970 - 71 29 February 1970 Indira Gandhi (Prime Minister)
29 1971 - 72 24 March 1971 Yashwantrao Chavan
30 1972 - 73 16 March 1972
31 1973 - 74 28 February 1973
32 1974 - 75 28 February 1974
33 1975 - 76 28 February 1975 Chidambaram Subramaniam
34 1976 - 77 15 May 1976
35 1977 - 78 17 June 1977 Hirubhai M. Patel Morarji Desai Janata Party
36 1978 - 79 28 February 1978
37 1979 - 80 28 February 1979 Charan Singh
38 1980 - 81 18 June 1980 Ramaswamy Venkataraman Indira Gandhi Indian National Congress
39 1981 - 82 28 February 1981
40 1982 - 83 27 February 1982 Pranab Mukherjee
41 1983 - 84 28 February 1983
42 1984 - 85 29 February 1984
43 1985 - 86 16 March 1985 V. P. Singh Rajiv Gandhi
44 1986 - 87 28 February 1986
46 1987 - 88 28 February 1987 Rajiv Gandhi
47 1988 - 89 29 February 1988 N. D. Tiwari
48 1989 - 90 28 February 1989 Shankarrao Chavan
49 1990 - 91 19 March 1990 Madhu Dandavate V. P. Singh Third Front (India)
50 1991 - 92 24 July 1991 Manmohan Singh P. V. Narasimha Rao Indian National Congress
51 1992 - 93 29 February 1992
52 1993 - 94 27 February 1993
53 1994 - 95 28 February 1994
54 1995 - 96 15 March 1995
55 1996 - 97 19 March 1996 P. Chidambaram H. D. Deve Gowda United Front (India)
56 1997 - 98 28 February 1997
57 1998 - 99 01 June 1998 Yashwant Sinha Atal Bihari Vajpayee National Democratic Alliance
58 1999 - 20 27 February 1999
59 2000 - 01 29 February 2000
60 2001 - 02 28 February 2001
61 2002 - 03 28 February 2002
62 2003 - 04 28 February 2003 Jaswant Singh
63 2004 - 05 (Interim) 4 February 2004
64 2004 - 05 8 July 2004 P. Chidambaram Manmohan Singh United Progressive Alliance
65 2005 - 06 28 February 2005
66 2006 - 07 28 February 2006
67 2007 - 08 28 February 2007
68 2008 - 09 29 February 2008
69 2009 - 10 (Interim) 16 February 2009 Pranab Mukherjee
70 2009 - 10 6 July 2009
71 2010 - 11 26 February 2010
72 2011 - 12 28 February 2011
73 2012 - 13 16 March 2012
74 2013 - 14 28 February 2013 P. Chidambaram
75 2014 - 15 (Interim) 17 February 2014
76 2014 - 15 10 July 2014 Arun Jaitley Narendra Modi National Democratic Alliance
77 2015 - 16 28 February 2015
78 2016 - 17 29 February 2016
79 2017 - 18 1 February 2017
80 2018 - 19 1 February 2018
81 2019 - 20 (Interim) 1 February 2019 Piyush Goyal
82 2019 - 20 5 July 2019 Nirmala Sitharaman
83 2020 - 21 1 February 2020
84 2021 - 22 1 February 2021
85 2022 - 23 1 February 2022
86 2023 - 24 1 February 2023
87 2024 - 25 (Interim) 1 February 2024

See also

References

  1. ^ "Procedure in Financial Matters" (PDF). Ministry of Law and Justice (India). p. 24. Archived from the original (PDF) on 24 August 2015. Retrieved 1 March 2015.
  2. ^ "How does government prepare its Union Budget every year". The Times of India. 31 January 2022. Retrieved 2 February 2022.
  3. ^ Chakraborty, Abhishek (21 September 2016). "Railway Budget, Presented For 92 Years, Merged With Union Budget". NDTV. Retrieved 6 March 2021.
  4. ^ a b Padmanabhan, Arvind (12 February 2014). "Chidambaram is second only to Morarji Desai in presenting Budget". Business Today. Retrieved 29 September 2017.
  5. ^ "Previous Union Budgets | Union Budget of India". www.indiabudget.gov.in. Retrieved 3 February 2021.
  6. ^ "Budget with a difference". 17 March 2001. Retrieved 8 March 2009.
  7. ^ "Union Budget 2017 on 1 Feb: End of a colonial hangover for speedy implementation of schemes". Firstpost.com. Firstpost. 16 November 2016.
  8. ^ "Printing Of Union Budget Document Begins With 'Halwa' Ceremony". NDTV. Press Trust of India. 19 February 2016. Retrieved 19 February 2016.
  9. ^ Joy, Shemin (3 February 2021). "16 Rajya Sabha MPs move 118 amendments to President Ram Nath Kovind's Budget session address". Deccan Herald. Retrieved 3 February 2021.
  10. ^ Ghosh, Deepshika (5 July 2019). "Bahi Khata, Not Briefcase. Nirmala Sitharaman Ends British-Era Tradition". NDTV.com. Retrieved 5 July 2019.
  11. ^ "2019 Union Budget of India". money.bhaskar.com. Archived from the original on 25 March 2019. Retrieved 28 January 2019.
  12. ^ "Unveiling the Interim Budget 2024 Blueprint". 29 January 2024. Retrieved 31 January 2024.
  13. ^ "The Central Budgets in retrospect". pib.nic.in. Retrieved 6 March 2021.
  14. ^ "Budget 2020: Who gave the longest Budget speech?". Deccan Herald. 25 January 2020. Retrieved 21 January 2021.
  15. ^ "Meet Manmohan Singh, the economist". 20 May 2004. Retrieved 22 February 2008.
  16. ^ "Salient Features of Interim Union Budget of India for 2014-15". IANS. news.biharprabha.com. Retrieved 17 February 2014.
  17. ^ "Union Budget 2018 Highlights: Key takeaways from Arun Jaitley's fifth Budget". Moneycontrol. Retrieved 1 February 2018.
  18. ^ "Expectation from union budget 2014-15". Patrika Group. 10 July 2014. Retrieved 10 July 2014.
  19. ^ "Budget 2019: Full text of Piyush Goyal's budget speech". Mint. 1 February 2019. Retrieved 1 February 2019.
  20. ^ "india budget" (PDF). Government of India. Retrieved 2 February 2021.
  21. ^ "Key Highlights of Union Budget 2019-20". Press Information Bureau, Government of India. 5 July 2019. Retrieved 27 August 2019.
  22. ^ a b "Finance Ministers of India: Budget through the years: The men who made India". The Economic Times. 29 June 2019. Retrieved 3 February 2021.