In contrast to today’s budgets, which keep in mind the welfare of ordinary Indians, the first budget was prepared keeping in mind the economic needs of the colonial administration.
As India braces for the Union Budget to be tabled in Parliament on February 1st, several trivia regarding this crucial process of Indian democracy are doing the rounds. As Finance Minister Nirmala Sitharaman delivers the budget speech, people often wonder when the tradition of presenting the budget began in India and what historical significance it holds.
First budget of colonial India
The first budget in India was presented on April 7, 1860, during British rule. This was the time when India was trying to recover from the wounds of independence. The budget was presented by James Wilson, the then Finance Minister of India.
In contrast to today’s budgets, which keep in mind the welfare of ordinary Indians, the first budget was prepared keeping in mind the economic needs of the colonial administration.
Independent India’s first budget
Following India’s independence in 1947, the first budget was presented on November 26, 1947, by the then Finance Minister, Sir RK Shanmukham Chetty. At that time, the nation was grappling with the tragedy of partition.
With an atmosphere of riots, displacement, and economic uncertainty all around, the expectations from the budget were sky-high. With the new financial year starting on April 1, 1948, the November 26 budget came as an interim measure.
The India-Pakistan connection of the first budget
One of the most unique things about the first budget is that it stipulated that both India and Pakistan would use the same currency until September 1948. Since the partition was just over, the economies of both countries were deeply intertwined, and a complete separation needed some time.
In its first budget, the total estimated revenue of independent India stood at Rs. 171.15 crore, with a fiscal deficit of Rs. 204.59 crore. A noteworthy fact about this budget was that, despite limited resources and the country facing extraordinary circumstances, the government made serious attempts at laying the foundation for administration, rehabilitation, and development.
