Why was Union Budget date moved to February 1?

The Union Budget, presented on February 1 since 2017, allows the government more time for financial adjustments before the fiscal year.

Come February 1, finance minister Nirmala Sitharaman will be presenting the Union Budget in Parliament and outlining India's financial trajectory for the coming year. ‘February 1’ has become synonymous with ‘Budget Day’.

Presenting the budget on February 1 was putting an end to a colonial-era practice. ( (ANI Photo/Rahul Singh))

However, this was not always the case. Earlier, the Union Budget was presented on the last working day of February, typically during the last week of the month, a practice which was in place since colonial times in India.

But it changed in 2017 when then finance minister Arun Jaitley declared that the budget would now be presented on February 1 instead of the end of the month, primarily for two reasons.

Reasons behind change in Budget date

Presenting the budget on February 1 ended a colonial-era practice as India continued to build its own identity. But the more important rationale behind Arun Jaitley's decision was the short duration the timing of the budget presentation, at the end of February at the time, left the government with to make and implement necessary changes before the upcoming fiscal year that starts in April.

With the budget being presented on February 1, it allows the government more time to adjust to the shift in financial practices and execute necessary changes before the next financial year.

More changes

The other significant change introduced by Arun Jaitley to the budget presentation in 2017 was the merger of the Union and the Railway Budget, which had been presented separately for almost a century before that. The government decided to merge both budgets in 2016. The decision was seen as a policy reform measure aimed at eliminating the “culture of populism” that had taken a heavy toll on the state-owned transporter’s financial health over the years.

Another major change that the budget presentation in India has seen is the timing. The budget was historically presented at 5 pm in India. The timing was switched to 11 am only in the year 1999.

This was done because the practise of presenting the budget at 5 pm was colonial. Since the Indian Standard Time (IST) is 4.5 hours ahead of British Summer Time (BST) and 5.5 hours ahead of the Greenwich Mean Time (GMT), presenting the budget at 5 pm in India ensures that it is done during the daytime in England at either 12:30 pm BST or 11:30 am GMT for the convenience of the British. However, in 1999, then Finance Minister Yashwant Sinha under the Atal Bihari Vajpayee-led government, presented the Union Budget at 11 am, changing the tradition forever.