New Delhi, Jan 27: The Union Budget for the year 2017-18 will be presented by Finance Minister Arun Jaitley in Lok Sabha in upcoming budget session. The session is scheduled to take place from Feb 1 to Feb 9. From the first budget in 1947 to last budget in 2016, the journey has been accompanied by huge growth that India witnessed in the past seventy years. This apart, the Union Budget proved to be an important tool in changing India’s growth trajectory.
Independent India’s first Budget was presented by first Finance Minister RK Shanmukham Chetty on November 26, 1947, for the seven and a half month-period from August 15, 1947 to March 31, 1948. The Budget Estimate for total revenues was a mere Rs. 171.15 crore. Fiscal deficit was estimated at Rs. 24.59 crore.
India’s First Prime Minister Jawahar Lal Nehru always emphasised that India’s complex problems could only be solved through planned economy. His vision was reflected in Union Budget in 1950 which laid the foundation of Planning Commission. Planning Commission played a crucial role in formulating Five-year plans. This apart, it was entrusted with function to allocate resources to states to achieve development goals. However, it was alleged to be arbitrary in its functioning. It was dissolved by NDA government led by Bharatiya Janta Party on 14th August, 2014.
Interestingly, Morarji Desai became the only Finance Minister to have presented the Budget ten times.
Another big turn was announced when then Finance Minister Manmohan Singh Presented Union Budget in 1991. The budget announced historic economic reforms in the country. The economic reforms are popularly known as Liberalisation, Privatisation and Globalisation (LPG). While Liberalisation advocated abolishing the License Raj, Privatisation emphasized on selling of loss making government undertakings to the private sector. Globalisation was introduced to bring the technology and finance to boost the growth of the country. The Union Budget also paved way to bring India out of Indebtedness.
The economic situation remained grim and India could have been barred from imports. Foreign Exchange Reserves stood merely at Rs 2500 crores, nearly 75 per cent lower than what it was prevailing in 1990. According to experts, had India not rushed up to take emergency measures, the country would not had received essential imports including oil and gas for more than three weeks.
The fiscal deficit was 8 per cent of GDP, whereas, the current account deficit stood at 2.5 per cent. The Reserve Bank of India (RBI) mortgaged India’s gold reserves with Bank of England to avail $200 million financial assistance to address the economic emergency in the nation. The budget successfully set the growth trajectory for India. However, it was called an unpopulist budget by observers.
The Indian government has proposed to spend Rs.19,78,060 crore in the fiscal year 2016-17, which is 10.8% higher than Rs. 17,65,436 crore, revised estimates for previous year. The Plan Expenditure for 2014-15 was revised from Rs. 575,000 crore to Rs. 467,934 crore due to a large deficit. The Plan Expenditure for 2015-16 was set at Rs. 465,277 crore. The Non-Plan Expenditure was estimated at Rs. 1,312,200 crore, with the total being estimated at Rs. 1,777,477 crore.The government expects Rs. 1,449,490 crore as tax receipts, of which Rs. 523,958 crore will go to state governments. Non-tax receipts were estimated at Rs. 221,733 crore for 2015-16.
The defence budget was increased from Rs. 2.29 lakh crore in 2014-15 to Rs. 2.46 lakh crore in 2015-16, an increase of 10.95%.The expenditure on healthcare was set at Rs. 33,152 crore for 2015-16, a reduction from Rs. 39,238 crore in 2014-15. Tax-free infrastructure bonds were re-introduced after a gap of one year.
The fiscal deficit for 2014-15 was 4.1% of the GDP. The target set for 2015-16 was that the fiscal deficit would be brought down to 3.9%. The revenue deficit target for 2015-16 was set at 2.8% of the GDP, 0.1% lower from 2014-15.
Let us see What Finance Minister Arun Jaitley has to offer this year.