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BUDGET HISTORY: INDIA


budget tan

1947: Independent India’s First Budget

  • Finance Minister: R.K. Shanmukham Chetty.
  • India’s first finance minister Presented: November 26, 1947
  • The Budget Decision: Well, the decision to present a budget itself, since it covered just 7-1/2 months, from August 15, 1947, to March 31, 1948

1951: The first Budget of the Republic of India

  • Finance Minister: John Mathai
  • Finance minister in the Congress government
  • Presented: February 28, 1950
  • The Budget decision: This budget laid down the roadmap for the creation of the Planning Commission. The Commission was entrusted with the responsibility of formulating phased plans for effective and balanced use of resources.

1957: The ‘Krishnamachari-Kaldor’ Budget

  • Finance Minister: Tiruvellore Thattai Krishnamachari
  • Minister of Finance in the Congress Government
  • Presented: May 15, 1957
  • The Budget decisions: Put severe restrictions on imports through an import licensing system; withdrew budgetary allocation for non-core projects, set up Export Risk Insurance Corp to protect exporters against payment risks. Brought in wealth tax, a tax on expenditure and a tax on railway passenger fee. Raised peak excise to 400 per cent. First attempt to distinguish between active income (salaries or business) and passive income (interest or rent). Raised income tax rates.

1968: People-sensitive Budget

  • Finance Minister: Morarji Ranchhodji Desai
  • Deputy Prime Minister and Minister of Finance in the Congress Government
  • Presented: February 29, 1968
  • The Budget decision: Ended the requirement of stamping and assessment by the Excise Department authorities of goods right at the factory gate and introduced the system of self assessment by all big and small manufacturers, a system still in use. Today, except for some goods such as cigarettes and alcoholic preparations most products are on the self-removal mode for the levy of excise duty.

1973: The Black Budget

  • Finance Minister: Yashwantrao B. Chavan
  • Minister of Finance in the Congress Government
  • Presented: February 28, 1973
  • The Budget Decision: Provided Rs 56 crore for the nationalisation of the general insurance companies, Indian Copper Corp and coal mines. This was a huge sum: the estimate for the budget deficit for 1973-74 was Rs 550 crore.

1986: The carrot & stick Budget

  • Finance Minister: V.P. Singh
  • Minister of Finance in the Congress Government
  • Presented: February 28, 1986
  • The Budget decision: Introduced MODVAT credit. This allowed credit/ set-off of duty paid on raw materials against the duty on final products. Why he did it: To reduce the cascading effect of taxes on the final price of goods.

1987: The Gandhi Budget

  • Finance Minister: Rajiv Gandhi
  • Prime Minister in the Congress government
  • Presented: February 28, 1987
  • The Budget decision: Introduced provisions related to minimum corporate tax, better known today as MAT or Minimum Alternate Tax.

1991: The Epochal Budget

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  • Finance Minister: Manmohan Singh
  • Finance Minister in the Narasimha Rao government
  • Presented: July 24, 1991
  • The Budget decisions: Overhauled the import-export policy, slashed import licensing and went for vigorous export promotion and optimal import compression to expose Indian industry to competition from abroad. Began rationalisation of duty structures by pruning the peak customs duty from 220 per cent to 150 per cent.

1997: The dream Budget

  • Finance Minister: Palaniappan Chidambaram
  • Finance Minister in the United Front Government
  • Presented: February 28, 1997
  • The Budget decisions: Made tax rates moderate for individuals as well as companies. Allowed companies to adjust MAT paid in earlier years against tax liability in subsequent years. Launched the Voluntary Disclosure of Income Scheme or VDIS, to bring out black money. Phased out ad hoc treasury bills used for financing the budget deficit.

2000: The Millennium Budget

  • Finance Minister: Yashwant Sinha
  • Finance Minister in the NDA Govt
  • Presented: February 29, 2000
  • The Budget decision: Phase out of Manmohan Singh’s incentive for software exporters. In Budget 1991, Singh had made income from software exports tax-free for three years , and then extended the tax holiday to perpetuity in Budget 1995.

 

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