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History of Budget: Waiting for the new one now!

The Financial Express

The first session of the recently-elected Lok Sabha convened from June 17 to July 26 and it is that time again when the whole nation sits tight keenly for that single bit of report that will decide a large number of financial decisions in the year ahead. The new legislature of Prime Minister Narendra Modi is said to show its first Budget on July 5, wherein it is required to give an understanding about the projects to be undertaken in the second term.

The new budget will be announced soon, but have you never thought who created the first ever budget of India?

james walson- presented the first ever budget
Christian Heritage Fellowship

The first Indian Budget was presented by James Wilson on February 18, 1869, when India was still under British rule. Wilson, whose designation was Finance Member of the India Council that exhorted the Indian Viceroy, was likewise the founder of The Economist and Karl Marx described him as an “economical mandarin of high standing”. He was the high priest of Indian taxation. He was a to a great extent self-educated man who had worked in his family occupation making and selling hats, before turning into a scholar and an author largely dependent on his brilliance and learning of financial matters and trade. James Wilson is the founder of what is today the worldwide behemoth Standard Chartered Bank.

Wilson arrived in India on November 28, 1859, at a time when the British government here was hard beset by financial stress in the wake of what the British called the Sepoy Mutiny and Indians called it their first War of Independence. This drained the government’s resources, leaving India with a huge debt. Wilson had great knowledge in finance and knew how the market worked and was considered the one who would help the nation. Because of his financial stability and great knowledge, he was appointed a member of Viceroy Lord Canning’s council in undivided India. Besides being the Finance Secretary to the UK Treasury and Vice-President of the Board of Trade, he was also a Member of the British Parliament, besides being Finance Secretary.

As a member of finance, James Wilson was posted in Calcutta in the Viceroy’s council which was equivalent to being the finance minister in those days. But, that’s not where Bhatia’s ambit ends. He had a strong passion is to seep deep into the financial history of India. And, that’s exactly how he unraveled that a man named James Wilson, after taking over his assignment in India, he introduced a Bill in the Indian Legislature to restructure tariff laws. Wilson’s statements also threw open a revolutionary chapter in the country’s financial history.

The man who successfully passed the first budget, James Wilson was also the man behind the introduction of the income tax act. The act of income tax collection was the most hated move and gave rise to a very big controversy. Wilson with his budget system gave India an invaluable financial governance tool by way of his budget, his income tax act on the other hand deeply dismayed businesses as well as the zamindars of that time.  

His argument against his not so accepted income tax was, that because the British government provided Indians a safe environment for trade, the Britishers are justified in charging a fee in the form of an income tax.

Ramasamy Chetty- free India budget

This was when India was not free, now talking about free India, the first Union Budget of Independent India was presented by the first Finance Minister, Sir R.K. Shanmugham Chetty, on November 26, 1947. The first union budget was presented during a very strange situation, amidst widespread riots that were caused due to the partition of India. This newly launched budget was meant to be in action for seven and a half months, following which the next budget was to be implemented from April 1, 1948. It was the first Union Budget wherein it was decided that both India and Pakistan would share the same currency till September 1948.

Sir Chetty resigned as the Finance Minister of India, and the responsibility ultimately was passed on to John Mathai, who presented the subsequent Union Budgets of 1949-50 and 1950-51

Budget Secrecy-

When it comes to keeping and maintaining the secrecy of these budgets, the Union Budget documents are treated with utmost secrecy.

Any leak in official figures can have a very catastrophic effect. The document is kept with so much secrecy that even the Finance Minister cannot keep the budget sheet with him. The Union Budget is prepared on the basis of data and key numbers in the Blue Sheet and the Finance minister is also not allowed to keep the blue sheet with him. Only the Joint Secretary has the power and authority to keep this important sheet.

Until 1950, all important budget papers were printed inside the Rashtrapati Bhavan premises. However, an imminent data leak left the government with no option but to shift the process to a government-operated press in Minto Road till 1980. Post 1980, the printing of budget papers is done in a basement in the North Block, where the Finance Ministry is located.

The Halwa Ceremony is a famous ritual, which marks the start of the printing of the budget documents. Understandably, officials who are directly in contact with the budget papers and data are locked down in the basement of the North Block. The Halwa ceremony marks the lockdown of the Finance Ministry. In this premise, even the Finance Minister is not allowed to carry a mobile phone.

Who would think that a man, whose father was just a textile mill owner will become a successful businessman himself, turning India’s first financial set-up back in 1860, and a member of parliament in England?

In the end, the Union Budget is the roadmap of the government’s estimated revenues and planned expenditures for a particular year. It is one of the most important presentations in Parliament.

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An impulsive writer and compulsive procrastinator, she energizes her daily grind with coffee, diversions and discourse. All she need to get through life is a flawlessly brewed coffee to accompany her vacillation and is lethargically motivated. On days when she is not writing, you’ll find her reading, watching movies and pigging out. Usually an escapist from worldly problem, seeking solace in books and food. Has a master’s degree in classical dance and has left no corners undiscovered when it comes to being creative and learning an art. A crazy coffee sweetheart who earnestly trusts in the magical power of words.