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Top 10 budgets over the years and the finance ministers behind them

As India closes in on Union Budget 2014 and all eyes focus on Arun Jaitley, we take a quick look at the top ten budgets that made history, and the finance ministers who propelled them.

india Updated: Jul 09, 2014 17:13 IST
Gaurav Choudhury

As India closes in on Union Budget 2014 and all eyes focus on Arun Jaitley, we take a quick look at the top ten budgets that made history, and the finance ministers who propelled them.

1947: The first budget

FM: RK Shanmukham Chetty

* Independent India's first budget presented in November 1947 focussed on agriculture, not surprising because the farm sector accounted for nearly 70% of the economy.

1950: Grow more food
FM: CD Deshmukh

* This budget was known for focussing on creating irrigation infrastructure, making India's agriculture less dependent in monsoon rains, and raising farm output.

* The budget proposed a "Grow More Food Plan."

1969: Bank nationalisation
FM: Morarji Desai

* The government nationalised 14 banks in 1969.

* Bank nationalisation played a very important role in India's economic development.

* Banks were forced to open up branches in remote areas.

* India's savings and investment rose steeply from 13% in the late 1960s to 23% in the late 1970s.

1971: 'Garibi Hatao'
FM: Indira Gandhi

* Indira Gandhi guided Congress to a landslide victory in 1971 on the back of a popular slogan "Garibi Hatao" that caught the fancy of the electorate.

* Congress won with a comfortable majority of 342 seats in a House of 518.

* In the budget speech for 1971, Gandhi said that "weaker sections are the greatest source of economic strength."

* Special "anti-poverty" programmes were introduced with discretionary government transfers to the poor.

* The high government spending turned India's central budget from revenue surplus to a revenue deficit.

1986: Reform by stealth
FM: VP Singh

* This budget saw first stirrings of liberalisation, but without fanfare giving currency to the phrase "reform by stealth."

* The process of de-licencing of industries, introduced first in 1985, carried forward.

* The multi-point excise duties converted into a modified value-added (MODVAT) tax significantly reducing the taxation of inputs.

1991: Opening up the doors
FM: Dr Manmohan Singh

* No discussion on economic reforms cannot but begin with Manmohan Singh's 1991 budget.

* The turning point in the Indian economy came on July 24, 1991 when Singh rose to present a Union budget that changed the course of the country's history.

* As finance minister between 1991 and 1996 the soft-spoken Cambridge-educated Singh threw open India's heavily regulated economy, dismantled the "License Raj" that prevented competition among firms.

* In a way, the 1991 budget can be credited with the creation of the "great Indian middle class" by unleashing the free spirit of entrepreneurship.

* In his budget speech Singh quoted Victor Hugo and compared India with an idea whose time has come. It indeed has come. Recent history tells us that.

1997: Dream budget
FM: P Chidambaram

* P Chidambaram's 1997 Budget was hailed as the "dream" budget for announcing measures that brought about a paradigm shift in macro-economic policy-making.

* He brought down peak income tax rate to 30 %, something that was almost unthinkable those days.

* It has remained the peak rate ever since underlining the theoretical "Laffer curve" principle that a wider base and lower rates yields higher revenues.

* He introduced the Voluntary Disclosure of Income Scheme (VDIS), a onetime amnesty scheme aimed at harnessing 'black money' for productive purposes.

2005: Welfare economics
FM: P Chidambaram

* Govt announced the National Rural Employment Guarantee Act paving the way for launching India's largest rural job guarantee scheme.

* The Finance minister announces a new 'Bharat Nirman' programme, promising to give a new deal to rural India.

* Value Added Tax (VAT) introduced across the country termed as one of the biggest tax reforms initiatives in independent India.

2008: Debt deal
FM: P Chidambaram

* Finance minister P Chidambaram raised the income tax exemption limit by Rs 40,000 to Rs 1.5 lakh per annum.

* He announced a Rs 60,000 crore farm loan waiver and relief scheme in his budget speech.

2012: Retrograde retrospective
FM: Pranab Mukerjee

* Finance minister Pranab Mukherjee announced a controversial policy to impose a "retrospective tax," which fuelled fears of an uneasy business environment for foreign entities.

* He proposed changes in India's 50-year-old tax laws to impose a retrospective provision for tax on some types of international mergers that may include Vodafone's 2007 acquisition of Hutchinson's mobile assets in India for $11.1 billion (about R68,000 crore currently).

* This was widely seen as a fallout of Vodafone's five-year court battle over the Rs 11,200 crore tax demand, with the government arguing that the British firm had concluded the Hutchison deal abroad (Cayman Islands) to evade taxes.