Must-Know Facts about the Union Budgets in India

Last Updated: 26 Aug 2025

The word Budget was derived from the Middle English word bowgette, which came from Middle French bougette meaning a leather bag. The Indian budget is presented in Parliament on a date fixed by the President. The Budget speech of the finance minister normally has two parts. Part A deals with a general economic survey of the country while Part B relates to taxation proposals.

The Finance Minister presents the annual Union Budget in the Parliament generally on the last working day of February. The Budget is the most extensive account of the Government finances, in which revenues from all sources and expenses of all activities undertaken are aggregated. It includes the revenue budget and the capital budget. It also comprises estimates for the next fiscal year called budgeted estimates. The Ministry of Finance, Planning Commission, Administrative Ministries and the Comptroller & Auditor General are the main players in the declaration of the Union Budget.

This blog sheds light on some interesting facts about Union budget in India.

First Indian Budget

Let’s go back in time and find out about the first budget in India.

The Origins of India’s Budget System

The Budget was first introduced in India on 7th April, 1860, from the East India Company to the British Crown. The first Indian Budget was presented by James Wilson on February 18, 1869. Mr Wilson was the Finance Member of the India Council that advised the Indian Viceroy. He was a Scottish businessman, economist and Liberal politician. He founded The Economist and the Standard Chartered Bank.

First FM was Sir RK Shanmukham Chetty

The first FM’s post went to Sir RK Shanmukham Chetty, industrialist, erstwhile Diwan of Cochin state and Constitutional Adviser to the Chamber of Princes. He had been a member of the pro-British Justice Party. The first budget of Independent India was presented by Mr. Chetty on November 26, 1947, in the backdrop of partition and riots. Since then, India has had as many as 80 budgets.

First budget of the Republic of India

John Mathai succeeded Mr Chetty. Mr Mathai, in 1949-50, delivered the most lucid Budget Speech as he decided not to read out all the details, telling members that a White Paper with all details was being circulated. He then gave a small lecture on inflation and economic policy. It was the first Budget for an actually united India, since it included the financial statements for former Princely States, and the biggest news was the news of the formation of the Planning Commission and the need for having five-year plans.

Mr Mathai was replaced by CD Deshmukh

John Mathai was succeeded by CD Deshmukh. Mr. Deshmukh, the first Indian Governor of the Reserve Bank of India as well as the Finance Minister, presented an interim budget for 1951-52. The major concern of Mr Deshmukh was to find money for the Plans, which meant higher taxes. In one Budget Speech, he tried to buck up taxpayers with the story of a letter he claimed he had got from a villager who paid no taxes, but wanted to help.

Deshmukh said, “He has remitted a sum of Rs 5 to me and has promised to remit a similar sum every year… so long as the common run of our people can produce men and women with this spirit, this country can face the future, however difficult it may be, with confidence.” It is not recorded if this made taxpayers happier to pay rather more than Rs 5.

Budgets don’t deal with issues like foreign relations, yet some sign of India’s tilt towards Russia can be seen in the Budgets of the 1950s. Foreign aid inflows to help the new nation were a major source of revenue, and at the start of the decade, these were mainly from the US and UK.

Wealth tax & expenditure tax

TT Krishnamachari, who succeeded Mr Deshmukh, was an industrialist who, strangely enough, had a lot of enthusiasm for taxation. In 1957, he created two new levies, a wealth tax and an expenditure tax, and sternly told those who had to pay these to display some patriotic spirit: “I am one of those who also believe that the greatest advances towards economic equality and positive social improvement are made in difficult times when the conscience and the solidarity of a people are raised to the highest pitch.” Krishnamachari, as the finance minister during 1964-65, introduced the voluntary disclosure of concealed income scheme in India for the first time.

Jawaharlal Nehru was the first prime minister to present the budget in the Indian budget history when he held the Union Finance Minister portfolio in 1958-59.

Morarji Desai Budget

Morarji Desai relished levying taxes. In 1968, he said: “I now come to the much dreaded part of my Budget speech. I trust Honourable Members will not take me to task if the proposals do not fulfil the expectations of dread… A deficit of this kind is usually an invitation to an FM to sharpen his knife…I propose to engage myself essentially in a minor operation of plastic surgery-taking out a little flesh here and adding a little bit there.”

Morarji Desai has presented the maximum number of budgets so far, almost ten. They included five annual and one interim budget in the second tenure when he was both Finance Minister and Deputy Prime Minister.

He 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.

Concessions for the poor

V.P. Singh, as finance minister, dwelt excessively on concessions for the poor. In his 1986 budget, he proposed railway porters, bank loans with a subsidy for rickshaw pullers, cobblers and the setting up of a small industries development bank, an accident insurance scheme for municipal sweepers.

Jawaharlal Nehru, Indira and Rajiv Gandhi have presented the budget while serving as the Prime Minister of India. Corporate tax (today is known as Minimum Alternate Tax) was first introduced by Rajiv Gandhi in the 1987 Budget.

Manmohan Singh’s role in the Budget

Manmohan Singh, in his first Budget Speech of 1991, made some personal remarks that recalled his own history: “I was born in a poor family in a chronically drought-prone village which is now part of Pakistan. University scholarships and grants made it possible for me to go to college in India as well as in England. This country has honoured me by appointing me to some of the most important public offices of our sovereign Republic. This is a debt which I will never be able to fully repay. The best I can do is to pledge myself to serve our country with utmost sincerity and dedication. This I promise to the House.”

Black Budget of India

The Black Budget of India refers to the Union Budget of 1973–74 presented by Finance Minister Y. B. Chavan. It got this name because of the bleak state of the Indian economy at the time, marked by a massive fiscal deficit, high inflation, and sluggish industrial growth caused by the aftermath of the 1971 war and a poor monsoon.

The budget placed heavy emphasis on public sector investment and imposed steep taxes on the wealthy and industries, offering little support to the private sector. With a fiscal deficit exceeding ₹550 crore, it was seen as a tough and growth-restricting budget.

The First Woman to Present the Indian Budget

One of the most interesting facts about Indian Union Budget is knowing who was the first woman to present it. Indira Gandhi was the first woman to present India’s Union Budget for the year 1970–71. She did this after the resignation of then Finance Minister Morarji Desai.

At the time, she was serving as the Prime Minister and briefly took charge of the Finance Ministry as well. This made her the first female finance minister of India, though she held the position only until March 1971, when Yashwantrao Chavan took over the role.

Change in Budget Time and Date Presentation

Until 1999, India’s Union Budget was presented at 5 pm. It was a practice inherited from the British period, as it suited the simultaneous announcements in London and India. As India is five and a half hours ahead of the UK, 5 pm in India corresponded to 11:30 am in London, which was convenient for coordination. Even after gaining independence, the timing persisted for years and years.

Finance Minister Yashwant Sinha altered the budget presentation hour in 1999 to 11 am. He did so because India no longer had to adhere to British timings and to provide more time to lawmakers to analyse the budget. On 27th February 1999, he tabled the first 11 am budget, and the practice has been followed ever since.

Earlier, the budget was presented on the last day of February. But in 2017, Finance Minister Arun Jaitley moved it to February 1 to help the government implement new policies from the beginning of the financial year on April 1. Also, the separate Railways Budget was merged with the Union Budget, ending a 92-year-old practice.

Conclusion

The Union Budget of India is a reflection of the country’s economic journey, priorities, and vision. From colonial traditions to modern-day reforms, the budget has evolved in structure, timing, and presentation. Through landmark moments, notable finance ministers, and historical policies, it offers deep insights into India’s socio-economic fabric. Understanding its key facts helps citizens appreciate how the government allocates resources, plans development, and responds to challenges, shaping the nation’s financial future every year.

Frequently Asked Questions

1. Who presented the first Union Budget of India?

The first Union Budget was presented by James Wilson on February 18, 1869. He was a member of the India Council and an advisor to the Viceroy.

2. Why do Indian Budgets begin with a speech in Parliament?

The budget speech marks the formal presentation of the government’s financial plan. It’s a tradition borrowed from British parliamentary practices, meant to ensure transparency and parliamentary approval before implementation.

3. Is the Economic Survey part of the Union Budget?

No, but it’s closely linked. The Economic Survey is released a day before the budget and provides a detailed overview of the economy’s health. It helps set the stage for the budget by outlining key issues and projections.

4. Who was the first woman to present the Indian budget?

Indira Gandhi presented the Union Budget for 1970–71. She held the finance portfolio briefly after Morarji Desai’s resignation.