Nirmala Sitharaman presents 7th consecutive budget today; How Has It Evolved Over The Years?

Union Finance Minister Nirmala Sitharaman is poised to deliver her seventh consecutive Union Budget on Tuesday, outlining a blueprint for India's development by 2047.

Following the Budget presentation, Finance Minister Sitharaman will hold a press briefing alongside Minister of State for Finance Pankaj Chaudhary, Finance Secretary T.V. Somanathan, Ministry of Finance Secretaries, and Chief Economic Adviser V. Anantha Nageswaran in the afternoon to address the government.

The economy expanded by 8.2% in the previous fiscal year, but growth in private consumption, which constitutes more than half of the nation's GDP, was notably lower at 4%. To stimulate consumer spending, the government might contemplate reducing personal income tax rates for individuals who are most likely to spend, as reported by Bloomberg News last month. This could potentially benefit individuals earning between 500,000 rupees and 1.5 million rupees annually, currently taxed in the range of 5% to 20%.

The BJP will face a series of crucial state elections in coming months including in Maharashtra, Haryana and Delhi. To bolster its chances, economists expect the government to increase cash handouts for farmers and hike funds for rural housing. The government could also increase wage rates under the fixed employment program.

India’s economic recovery post-pandemic has been largely fueled by government investment in infrastructure, which has more than tripled since the 2018-19 budget. In February, Sitharaman increased the allocation for capital expenditure by 11.1% for the current fiscal year, raising spending to 3.4% of GDP.

In February, the government announced plans to broaden production-linked incentives for labor-intensive industries such as toys, leather, and footwear. Upasna Bhardwaj, chief economist at Kotak Mahindra Bank, suggested in a note that the government might also extend the reduced corporate tax rate of 15% for new manufacturing businesses beyond March 31.

EVOLUTION OF BUDGET OVER THE YEARS - 

• James Wilson, a Scottish economist employed by the East India Company, delivered India's inaugural interim budget in 1860 during the British era.
• In 1947, RK Shanmukham Chetty presented India's first interim budget which addressed critical issues such as food grain scarcity, rising imports, and widespread inflation.
• Union Finance Minister Yashwant Sinha, in 2001, moved the Budget announcement time from 5:00 pm to 11 am, breaking from a colonial tradition.
• Until 2016, the Budget was traditionally presented on the last working day of February.
• In 2019, Nirmala Sitharaman transformed the visual presentation of the budget, replacing the conventional briefcase with a 'bahi khata'.
• The transition to a paperless budget in 2021 marked a significant technological advancement.
• Finance Minister Nirmala Sitharaman delivered India's longest budget speech in history in 2020—lasting two hours and 42 minutes. However, her speech did not surpass the word count record set by former Prime Minister Manmohan Singh.
• In 1950, the Union Budget was inadvertently disclosed during Finance Minister John Mathai's tenure.
• Following 1980, the budget printing process was relocated from Rashtrapati Bhawan to Minto Road.
• The transition to bilingual presentation occurred in 1955-56, with budgets being printed in both English and Hindi.

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