Journey of Union Budget in India

Abstract

Every year, country governments world over envisage on preparing and presenting to their people a proposal called budget. Through this mechanism the government shares its plan of future course of action, particularly in terms of its revenues and expenditure for a period of one year called the fiscal year. In India also, this exercise is in practice since a long time. Our finance minister has the privilege of presenting the union budget to the parliament every year in the month of February. Our first budget was presented by James Wilson way back on 18th February 1869. The first finance minister of the independent India Sir R.K. Shanmugham Chetty, who was not a member of the congress presented the first Indian budget on 26th Nov 1947. Morarji Desai has the distinction of presented 10 budgets for the country which is the maximum number so far presented by an individual in India. Carrot and stick budget was presented by VP Singh in the year 1986. The Epochal budget was presented by Dr. Man Mohan Singh which transformed the EXIM policy. In the year 1997 P. Chidambaram presented a dream budget which resulted in the moderation of tax base. This resulted in an overall improvement in income tax collections. Balanced economic growth with a focus on equality and social justice has been the cornerstone of union budget in India. Among others, the Economic growth, Reducing poverty, Creating employment opportunities, Reducing inequalities in society thereby giving way for redistribution of Income, allocation of resources, curtailing inflation, ensuring economic stability and management of public enterprises are the broad guiding principles within which the union budget is prepared. Analysis of budgets revenues and expenditure over a period of time reveals that major heads of governmental revenues comes from Corporate tax, Income tax, Customs, Union excise duties, Service tax & other taxes, Non-tax revenues, Non-debt capital receipts, Borrowings & other liabilities. Similarly, major heads of governmental expenditure is on States share of taxes and duties, Finance commission and other transfers, Subsidies, Defence, Interest payments, Central sector schemes, centrally sponsored schemes and other expenditure & Pensions. A secondary analysis of revenues and expenditure in Indian budgets does not show much change as a proportion in the governmental revenues and expenditure between 2017 and 2019.