Budget Day

The first Union budget of independent India was presented by R. K. Shanmukham Chetty on 26 November 1947.[2]

The Union budgets for the fiscal years 1959–61 to 1963–64, inclusive of the interim budget for 1962–63, were presented by Morarji Desai.[2] On 29 February in 1964 and 1968, he became the only finance minister to present the Union budget on his birthday.[3] Vyas presented budgets that included five annual budgets, an interim budget during his first stint and one interim budget and three final budgets in his second tenure when he was both the Finance Minister and Deputy Prime Minister of India.[2]

After Desai's resignation, Indira Gandhi, the then Prime Minister of India, took over the Ministry of Finance to become the only woman to hold the post of the finance minister.[2]

Pranab Mukherjee, the first Rajya Sabha member to hold the Finance portfolio, presented the annual budgets for 1982–83, 1983–84 and 1984–85.[2]

Rajiv Gandhi presented the budget for 1987–89 after V P Singh quit his government, and in the process became only the third Prime Minister to present a budget after his mother and grandfather.[2]

N. D. Tiwary presented the budget for 1988–89, S B Chavan for 1989–90, while Madhu Dandawate presented the Union budget for 1990–91.[2]

Manmohan Singh became the Finance Minister but presented the interim budget for 1991–92 as elections were forced.[2]

Due to political developments, early elections were held in May 1991 following which the Indian National Congress returned to political power and Singh, the Finance Minister, presented the budget for 1991–92.[2]

Manmohan Singh, in his next annual budgets from 1992–93, opened the economy,[4] encouraged foreign investments and reduced peak import duty from 300 plus percent to 50 percent.[2]

After elections in 1996, a non-Congress ministry assumed office. Hence the final budget for 1996–97 was presented by P. Chidambaram, who then belonged to Tamil Maanila Congress.[2]

Following a constitutional crisis when the I. K. Gujral Ministry was on its way out, a special session of Parliament was convened just to pass Chidambaram's 1997–98 budget. This budget was passed without a debate.[2]

After the general elections in March 1998 that led to the Bharatiya Janata Party forming the central government, Yashwant Sinha, the then Finance Minister in this government, presented the interim and final budgets for 1998–99.[2]

After general elections in 1999, Sinha again became the finance minister and presented four annual budgets from 1999–2000 to 2002–2003.[2] Due to elections in May 2004, an interim budget was presented by Jaswant Singh.[2]

Until the year 2000, the Union Budget was announced at 5 pm on the last working day of the month of February. This practice was inherited from the Colonial Era when the British Parliament would pass the budget in the noon followed by India in the evening of the day.

It was Mr.Yashwant Sinha, the then Finance Minister of India in the NDA government (led by BJP) of Atal Bihari Vajpayee, who changed the ritual by announcing the 2001 Union Budget at 11 am.[5]

Until the year 2016, the Union Budget was presented in the Lok Sabha on the last working day of February.

It was Mr. Arun Jaitley, the Minister of Finance in the BJP led NDA Government under the Prime Ministership of Mr. Narendra Modi, who changed the date of the Annual Budget of 2017 to the first working day of February.

Additionally, the Railway Budget was also merged with the General Budget after 92 years in 2017. [6]

The Chancellor, Treasury ministers, and officials will have been working on the Budget some time in advance of Budget Day. Geoffrey Howe initiated the tradition of a weekend meeting, for all Treasury ministers and officials, outside London and some time in advance of Budget Day, for discussing the Budget. This meeting is now a customary part of the annual Budget preparations.[9]

The monarch is the first person to be told of the Budget. Queen Elizabeth II has customarily invited the Chancellor to dinner the day before Budget Day, where she is given an outline of the Budget.[9]

The Budget is presented to the Cabinet before being presented to Parliament. Formally, the Cabinet has power to amend the Budget. In practice, however, this is made impossible by the fact that the Budget Cabinet meets on the very morning of Budget Day itself, far too late for any but very minor changes to be effected. The Budget is presented to the Cabinet largely as a fait accompli by the Chancellor, the various junior Treasury ministers, and the Prime Minister (in the role of the First Lord of the Treasury).[9]

This swiftness is justified on the grounds of secrecy. It is considered essential the budget details not leak before the Chancellor's public speech. (In 1936, James Henry Thomas famously leaked Budget details after the Budget Cabinet, which at the time was being held five days before Budget Day, which had been until that point the traditional period between the Budget Cabinet and Budget Day itself.) Little objection has apparently been raised by the Cabinet to this. The only times that the Budget Cabinet has raised objections causing last-minute amendment to the Budget have been:[9]

1945

Hugh Dalton removed a proposal to change the tax on fuel oil.

1951

Hugh Gaitskell responded to Cabinet pressure and abandoned his plans for a differential fuel tax.

1962

Cabinet persuaded Selwyn Lloyd to announce the early abolition of the tax on home owner-occupiers.

1981

The so-called "wets" in the Cabinet persuaded Geoffrey Howe to increase the state pension in line with inflation, which he had not wanted to do. (Margaret Thatcher recorded in her memoirs that "[t]he dissenters in the Cabinet ... had been stunned by the budget when they learnt its contents".)

The Chancellor's Speech in the House is given immediately after what is usually a somewhat lacklustre Prime Minister's Question Time, it being largely overshadowed by what is seen as the main Parliamentary event of the day, now usually around 12:30 but previously about 15:30. Nigel Lawson reports that after the press photo-call at 15:15, where like all chancellors he would hold the red dispatch box, purportedly containing the budget speech,^N1 aloft; he used to spend time in his room, just behind the Speaker's chair, collecting his thoughts, before entering the house at 15:25, usually to the sound of "a roar from the Government benches".[12][15]

It has varied in length over the years. Macmillan remarked that he "would try not to prolong the agony", and once opined of the speech that he did not think it "necessary to start with the usual long review of the events of the last financial year".[14] The longest continuous budget speech was delivered by William Ewart Gladstone on 18 April 1853 and lasted 4 hours and 45 minutes. The shortest was given by Benjamin Disraeli in 1867 and lasted 45 minutes.[16]

It is also a parliamentary tradition that whilst making the Budget Speech the Chancellor may drink whatever he or she wishes, including alcohol which is otherwise forbidden. Past Chancellors have opted for whisky (Kenneth Clarke), gin and tonic (Geoffrey Howe), brandy and water (Benjamin Disraeli), spritzer (Nigel Lawson) and sherry and beaten egg (William Ewart Gladstone). George Osborne, as well as his two Labour predecessors Alistair Darling and Gordon Brown, have opted for water.[17][18]

The Speech is followed by a debate, which can last for several days. In theory, the report and the financial proposals that the Chancellor sets out in the speech are immediately considered and debated by the House, with the Chancellor in attendance to respond to arguments and, occasionally, to amend proposals. Young reports one Member of Parliament observing that Chancellors customarily "keep up their sleeves one or two million pounds which they propose to give away in concessions during the course of the Finance Bill debates".[10]

In practice, practical concerns dictate otherwise. Nigel Lawson reports, "[as] soon as MPs realise that the tax announcements are over they dash out of the Chamber to get their copies of the Financial Statement and Budget Report — the 'Red Book'".[12]

Similarly, there is a rush by the news services to report Budget items. Young observed in the 1960s that newspapers were "on the street, within minutes it seemed, bringing the glad tidings: TUPPENCE OFF BEER. INCOME TAX DOWN.". Since Parliament has been televised, TV news services have broadcast the Chancellor's speech live, as a "Budget special".[10]

Between 1952 and 2011, the Chancellor would, in the evening of Budget Day, make a television party political broadcast about the budget. Similar broadcasts were made, in response, by representatives of the major Opposition parties. All broadcasts were arranged through the normal Parliamentary processes for arranging party election broadcasts.[9][19] This tradition was discontinued, starting with the 2012 budget, as part of wider changes to the scheduling of party political broadcasts.[20]

The Finance Bill proper is only itself presented to Parliament some time after Budget Day, and is debated for days or even weeks afterwards. It is common for the bill to be passed, becoming the Finance Act, some time in late July. The Act back-dates its provisions, so that they take effect either from Budget Day itself or from the start of the fiscal year.[21]