How has the Union Budget evolved over the years?
Dosto August 2021 mein, India will be celebrating 75 years as an Independent nation. In over seven and a half decades, hamara desh bahut badal chuka hai: the landscape of the country has changed, the demographics have changed, the way we govern has evolved and of course it follows that the Union Budget has evolved too.
From minute details like the fact that last year, our lady Finance Minister, carried the Budget documents in a red bag (called a bahi-khata or a ledger) rather than the typical briefcase, to big changes like the date when the Union Budget is declared, to herculean shifts like where the top-secret document is printed, there have been countless changes. The Union Budget is also credited for the evolution in the various taxes applicable, exemption limits and so on. The budget itself has evolved and it has also been responsible for a lot of evolution with regards to the country’s financial and economic policies. Of course, the common man’s sentiments to some changes is a discussion for another day. Iss podcast mein flavour-of-the-day hai sirf: changes aur evolution.
Toh kya hai yeh changes or change banane ki kya vajah thi? Chaliye dekhte hai. Let's take a walk down memory lane.
1950 - Until this year, all the top secret documents related to the Union Budget were printed inside Rashtrapati Bhavan. However, in this year, a data leak that nearly took place, made the government worry that there was still far too much access, even within Rashtrapati Bhavan. Toh printing ka jagah shift ho gaya aur yeh saal ke baad, budget document ka printing government ke ek press, jiska address Minto Road tha, yeh press mein kiya jata tha.
1947 - This was the first year that we presented our very own budget, by our very own people. At this point, the budget was presented in November, by former Finance Minister, R K Shanmukham Chetty.
1948 - This was the first time that an interim budget was announced, or a short-term budget presented in the year of general elections, just before the Lok Sabha elections were conducted.
1949 - Chaliye dost, time machine khoj ke, let us travel back to 1949 kyuki yeh saal mein capital gains tax abolish kiya gaya tha. Lekin, ye dobara reinstate bhi ho chuka hain.
1950 - Planning Commission yeh saal mein introduce kiya gaya tha. The commission is headed by the Prime Minister. Commission ka responsibility hai to develop a plan for the country’s development. Based on this, the Union Budget will allocate funds to various states and union territories and so on.
1953 - This one is sure to make everyone smile. Iss samey, the income tax exemption limit was at Rs 3,600 for individual taxpayers. 1953 mein, the limit was increased to Rs 4,600, after which one had to pay income tax.
1955 - From this year onwards the budget was presented, not only in English as it had been in the past, but in English and in Hindi as well.
1956 - Capital gains tax was reintroduced. And many are still complaining and worried about it even today!
1958 - Introduction of gift tax. Ji haan we all know the famous story about our Master Blaster Sachin Tendulkar receiving a car from Ferrari and the whole public discussions over the Rs 1.1 crore tax that he would typically have to pay. Well, this is where that tax originated. Back in the 1950s.
1962 - Income tax rates jumped by a whopping 70-odd percent! It then came closer to the rates that taxpayers may find unfair so much today.
1968 - Until this time married couples could avail exemptions using Spouse Allowance, which allowed them tax exemptions as a couple. However misuse of the allowance was noted by the government and it was therefore abolished.
1965 - Yeh saal mein government ne black money declare karne ke liye public ko chance diya tha. Union Budget 1965 mein announce kiya gaya, that individuals can deposit undeclared cash to the RBI.
1970 - This was the first time that a woman presented the Union Budget, namely Indira Gandhi was the Prime Minister and Finance Minister at the time having taken over the latter role due to Morarji Desai’s resignation.
1980 - 40 saal ke baad, Union Budget ka printing location dobaara badal gaya, aur abhi bhi Union Budget ka printing issi jagah mein hota hai. Yeh hai Finance Ministry ke North Block ke kisi basement. Of course, there is tight security and nobody can just waltz in there. Moreover, on these premises, even the Finance Minister is not allowed to intervene in security in any way. For example, people are not allowed to carry their cell phones into this zone. And once the printing begins, nobody is allowed to enter or leave until the budget announcement. In fact last year itself there was a staff member who was locked-in on the premises along with his colleagues. The government press deputy manager lost his father during the period of utmost secrecy, when nobody is allowed to leave. He received credit and praise during the Finance Minister’s speech but leaving in this period of grief was not an option for him or for anyone else.
1981 - A 15% tax on F&B was imposed on luxury hotel receipts starting this year. The government stated that the purpose was to make people think twice when spending on non-essentials and to encourage some amount of savings.
1986 - This was the year in which Modified Value Added Tax was introduced. 1989 - Public ka khaas dost ELSS, yaani ke Equity Linked Saving Scheme, ka Union Budget 1989 mein janm hua. ELSS allows investors to get an exemption of Rs 150,000 under 80C of the Income Tax Act for investments made in ELSS mutual funds.
1993 – This Union Budget made a big evolution because it was as a part of this budget that the National Stock Exchange, or NSE, was launched.
2006 – GST yeh saal mein conceive ho gaya tha. It would be a budget-effected change that nobody was looking forward to.
2013 – A change made by the Union Budget to taxation in this year was a 10% tax for India’s super-rich taxpayers who displayed in excess of 1 crore in taxable income.
2017 - Yeh saal tak, Railway Budget or Union Budget saath mein nahi kiya jata tha. Lekin 2017 mein pehli baar, the two budgets were presented together and the practice has stuck ever since
Yehi saal mein another very big change took place. Up until Union Budget 2016, the Budget was always announced and presented on the last day of February. However, from four years ago, the budget is presented on the first day of February.
This was also the year that Goods and Services Tax, that is GST, was introduced. The idea of introducing GST was to make taxation simple and lighter on the common man. Ever since its introduction, people have had polarizing opinions about the same.
2020 - Finance Minister Nirmala Sitharaman became the first full-time lady Finance Minister to announce the Union Budget.
The 2021 budget will have to face the challenges head on. This budget will also focus a lot more on health than usual.
India, along with the rest of the planet, experienced a deadly pandemic in 2020. The Minister of Finance noted that the budget will be "like no other" this year because this will be the first budget presented after a pandemic. An increased emphasis on healthcare, telemedicine, vaccine delivery, economic recovery, and providing assistance to small businesses is likely to be the core elements of the budget of this year!
The Union Budget has certainly evolved over the years. But of course some delightful things like the delightful halwa ceremony have not changed over the decades.
Keep up to date with how the upcoming budget is likely to affect you: suniye humare dusre podcasts bhi. Yaad rakhna: announcements and changes made during the Union Budget will kahi na kahi have some impact on your investments and as a result dhyan dena bahut important hai. Till then we bid you goodbye and Happy Investing !