The Union Budget for 2024-25 is set to be presented by Finance Minister Nirmala Sitharaman on July 23. This is the first in the new BJP-led NDA government. The Budget is a detailed statement of the government's finances, including revenues and expenditures.
It has a rich history, dating back to the colonial era and has evolved significantly over time.
History of the Union Budget
The first Union Budget of India was presented on April 7, 1860, by James Wilson, the finance member of the Indian Council and founder of The Economist newspaper.
India was under British colonial rule at the time and this budget was a response to the financial difficulties faced by the British administration in India following the Revolt of 1857 (Sepoy Mutiny).
After the unsuccessful rebellion, James Wilson was sent to India by Queen Victoria to reform the country's financial structure, establish a tax system and introduce a new paper currency. The British parliamentarian then introduced income tax, which remains a significant source of revenue for the government to this day.
According to the book The Financial Foundation of The British Raj by Sabyasachi Bhattacharya, the government was considering introducing direct taxes, but they weren't sure how to implement it. They had a bill for a licence tax, but it wasn't well-planned or organised.
After Mr Wilson arrived in India, he scrapped that bill and introduced two new bills: income tax and licence tax, which were more structured and effective. In his financial statement, James Wilson announced that people with an annual income below Rs 200 need not pay taxes.
James Wilson also introduced an appropriation audit based on the English model to monitor monthly expenditure accounts. As India's first finance officer, he was tasked with addressing the financial challenges in the subcontinent following the rebellion.
However, he died of dysentery in Kolkata in August 1860, just a few months after presenting the first budget.
Post-independence
After India gained independence, the first Union Budget was presented on November 26, 1947, by RK Shanmukham Chetty, the first Finance Minister of independent India. The budget focused on stabilising the economy, rebuilding the country, and laying the foundation for future growth.
In later years, the budget was presented by Finance Ministers like P Chidambaram, Yashwant Sinha, Jaswant Singh and Arun Jaitley. Nirmala Sitharaman has been presenting the budget since 2019.
