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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
Gaurav Choudhury
Hindustan Times
Union Budgets in history,top ten,finance minister

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.

First Published: Jul 09, 2014 13:42 IST