Important Union Budgets

Important Union Budgets

1947 - The First BudgetFinance Minister: R K Shanmukham Chetty The first budget presented in November 1947 concentrated on agriculture while over

the next ten years the focus moved to the industrial sector with a focus on forestry,

fishing and textile.

1950 : The Agriculturist’s BudgetFinance Minister: C D Deshmukh The budget proposed a Grow More Food Plan to push agriculture via assured irrigation

to meet the growing demand. The Grow More Food Plans towards economic development

showed short-term growth but didn’t help in the long run.

1969: Bank NationalizationFinance Minister: Morarji Desai The government nationalized 14 banks in 1969.

It became mandatory for banks to provide 40% of their net credit to priority sectors like

agriculture, small-scale industry, retail trade, small businesses, etc. to ensure that the banks

fulfill their social and developmental goals. The 60s saw budgets focus on public finance, savings,

taxation and inflation. The aim was to secure a balance

between consumption and investment on resources besides

increasing exports.

Finance Minister : Indira Gandhi Indira Gandhi in her maiden budget speech claimed, “the weaker sections are the

greatest source of economic strength”. She proposed “anti-poverty programmes”.

The budget introduced special schemes and discretionary transfers. It sought to

combine social welfare expenditure and future growth potential.

1970: GaribiHatao

The budget set the economy on the irreversible

path of high spending by central government.

Revenue surplus turned into a revenue deficit.

Finance Minister: VP Singh This year saw the launch of a long-term program for tax reform.

The excise policy saw a major overhaul.

Fiscal Policy was designed to widen tax base.

The budget introduced the modified value added tax or Modvat. It allowed

manufacturers to obtain instant and full reimbursement of excise duty paid on

components and raw materials.

1986: Cheers for Tax Reform

Finance Minister: Manmohan SinghThis budget changed the rules of the game through an inclusive economic strategy, all

new currency policy, abolishing the licence regime.

The new import-export policy opened up the economy for FDI. Foreign investment

limit in high-priority industries was raised to 51%.

1991: Rise of a New India

Interest rates were made flexible. Commercial banks

were allowed to set interest rates based on risk on loan.

The private sector emerged as the star gainer. The

opportunities and scope of expansion increased

manifold.

The 1991 Budget changed the way the world viewed

India.

1997: The Dream BudgetFinance Minister: P Chidambaram

This budget is not called the Dream budget for

nothing. The budget presented a road map for

economic reforms in India. Tax structure got a rejig.

A slew of measure both on the direct and indirect

tax front changed India’s tax landscape.

Maximum income tax rate for individuals was cut from 40% to 30%. Income tax rate

for companies was decreased to 35% per from 40%.

Peak customs duty came down to 40% from 50%.

Dividend tax on individual investors was abolished.

This budget introduced the Voluntary Disclosure of Income Scheme, that targeted

recovery of black money.

Tax filing was made mandatory based on ownership

of a telephone, four-wheeler, occupation of immovable

property and foreign travel.

2002: The Rollback BudgetFinance Minister :Yashwant SinhaThis budget is often called the Rollback budget

because it saw as many key proposals were

withdrawn or rolled back by the finance minister.

Rebate in income tax under Section 88 of the IT

Act was cut to 15% for the Rs 1.5 lakh and Rs 5 lakh

bracket. The original proposal had reduced the tax

rebate in this bracket from 20% to 10%. And tax

rebate for income up to Rs 1.5 lakh was rolled back

to 20%.

5% service tax on life insurance premium, was scrapped. 4% excise duty on spare

parts and accessories of bicycles, hand pumps, toys and umbrellas was abolished.

LPG price hiked by Rs 40 per cylinder was reduced to a cut of Rs 20 per cylinder.

100% income tax deduction on export profits in SEZs, software technology parks

(STPs) and 100% EOUs was restored. The budget had proposed to restrict the tax

deduction to 90% of profits.

But it was not all bleak – this budget was a boon for the housing sector. Housing was

considered a growth driver. Construction for residential purposes was incentivized.

Indirect tax policy was also reformed with the introduction of VAT or value added tax.

VAT now is the backbone for the introduction of GST.

2005: Social Sector ImpetusFinance Minister: P Chidambaram Landmark schemes of the government like National Rural Health Mission, Gender

Budget and NREGA were announced first time in budget of 2005-06.

The National Rural Health Mission is a health program for improving health care

delivery across rural India. The scheme proposes a number of new mechanisms for

healthcare delivery including training local and the JananiSurakshayYojana (motherhood

protection program). It also aims at improving hygiene and sanitation infrastructure.

National Rural Employment Guarantee Act (now called MGNREGA) is a job

guarantee scheme. It provides a legal guarantee for one hundred and fifty days of

employment in every financial year to adult members of any rural household willing to

do public work-related unskilled manual work at a minimum wage. If they fail to do so

the government has to pay the salary at their homes.

Budget Simplified

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