Interesting Facts about Budget
Morarji Desai presented as many as 10 budgets, the highest so far. They included five annual budgets and one interim budget in his second tenure when he was both Finance Minister and the Deputy Prime Minister.
Morarji Desai presented annual budgets for each year from 1959-60 to 1963-64 and the interim budget for 1962-63. The annual budgets for three years between 1967-68 and 1969-70 and the interim budget for 1967-68 were also presented by Morarji Desai.
He was also the only Finance Minister to present two budgets on his birthday on February 29 in 1964 and 1968
BLACK MONEY and Budget
The disclosure scheme for black money was introduced for the first time in the 1965-66 budget. T T Krishnamachari was the finance minister. Minimum Alternate Tax or Corporate tax was first introduced by Rajiv Gandhi in his Budget in 1987.
DR SINGH’S BUDGET
Dr. Manmohan Singh’s path-breaking Budget of 1992-93 cut import duties from a peak of over 300% to 50%. He also liberalized the economy and promoted foreign investments. Dr. Singh introduced the Service Tax in his 1994 budget to tap the growing sector.
Yashwant Sinha started his budget speech for the first time in 2001 from 11 am. He introduced the Transfer Pricing Regulations in his 2001-02 Budget. This regulation played a big role in preventing the erosion of the tax base in India.
First Budget of Independent India
On November 26, 1947 India’s first Finance Minister R.K. Shanmukham Chetty had presented the first budget of Independent India. But actually it was a review of the economy and no new taxes were proposed as the budget day for 1948-49 was just 95 days away.
Glossary of budget
Consolidated Fund is made up of all revenues and loans raised by the Government. It also includes also its receipts from recoveries of loans granted by it. All expenses of the government are incurred from the Consolidated Fund. No amount can be withdrawn without Parliament’s authorization.
Contingency Fund is an impress that is placed at the President’s disposal. It is used by the government to incur all its urgent and unforeseen expenditure. Parliamentary approval for expenditure is taken after it is spent and an equivalent amount from the Consolidated Fund is recouped to the Fund.
Demands for Grants
Demands for Grants are statements of estimates of expenditure from the Consolidated Fund. The Lok Sabha votes on them. Generally, each ministry or department presents its Demand for Grant.
This contains the government’s proposals for levying new taxes and modifying the existing tax structure or even continuing the existing one beyond the period approved by Parliament. It is submitted to Parliament along with the Budget.
Plan Expenditure is an expenditure that increases the productive capacity of the economy. It includes spending in different sectors like rural development and education. Estimates are arrived at after discussions between various ministries and the Planning Commission. It forms a sizeable proportion of the total expenditure of Centre.
These are obligatory or mandatory expenses of the government. Constitutes almost 70% of its expenditure Interest payments + subsidies (mainly food and fertilisers) + wages and salaries to government & police personnel + grants to States and Union Territories + pensions + economic services + costs incurred on general services + tax collection + social services + grants to foreign governments Non-plan capital expenditure: Spending on defence + loans to public enterprises+ loans to States, Union Territories and foreign governments
The difference between what the government spends and the revenues it receives. Represents total funds it has borrowed to meet its expenditure. It’s the gap between the total spending and the sum of its revenue receipts and non-debt capital receipts.
Capital Budget is made up of capital receipts and payments.
Capital receipts are loans raised by the Government. Borrowings from the public are market loans, from the Reserve Bank and other parties are through the sale of Treasury Bills. Other items are loans from foreign Governments, recoveries of loans granted by the Centre to the State and Union Territory Governments and other parties.
Capital payments are expenses on acquiring assets like land, buildings, machinery, equipment, investments in shares, loans and advances by the Centre to State and Union Territory Governments, Government companies, Corporations and other parties.
PRINTING THE BUDGET
Printing of Budget documents starts with a ritual in which ‘halwa’ is prepared and served to the entire staff in the Finance Ministry. Employees including officials and support staff printing the Budget papers are then kept in complete isolation for an entire week before the Budget. They are cut off from their families till Finance minister presents the Budget in the Lok Sabha. No one, except some senior staff, is allowed communication with their near and dear ones on phone or through any other form like email.
PRESENTING THE BUDGET
Budget is presented in Parliament on a date fixed by the President. This is usually on the last working day of February. The Finance Minister presents the annual Union Budget in Parliament. The Finance Minister delivers the Budget speech. It consists of two parts. Part A deals with general the economic survey of the country while Part B relates to taxation proposals.
The convention of the budget speech being delivered at 5 pm was set by Sir Basil Blackett in 1924. According to him, this was done to give relief to officials who worked all night to present a financial statement. After Independence, India’s first Finance Minister R.K. Shanmukham Chetty, presented the first Budget at 5 pm on 26th November, 1947.