History of Budget

• During the forties, the focus was on recovery from partition. Initial budgets were geared towards the slow rebuilding of the country and its economy.

• Growth of trade was an important objective of the budgets but with the world also in a slow recovery from the second world war, the going was tough for India.

40’s & 50’s

• The socialist pattern adopted by the country was a pillar that guided the budgets in the fifties.

• The base was being laid for the heavy industries and projects that came to mark the country’s initial burst of economic activity.

40’s & 50’s

• The budget tried to raise resources both internally as well as externally but there was still a lot of reliance on foreign aid.

• The two wars that the country fought took a toll on the budget and defence expenditure had to be beefed up.

• Expenditure continued towards the state run enterprises which were the tools of realising the socialist vision of the country.

60’s

• The early seventies saw the budget giving encouragement to small enterprises so as to breed an army of entrepreneurs in the country.

• There was a focus on urban areas including price controls so as to develop housing and other facilities for the large number of people living in cities.

70’s

• Growth continued to lag at around 3.5% on an average. So the budget tried to undertake efforts to give a boost to bring it up to the 5%.

• Budgets also tried to ensure that the various targets set out in the 5 year plans were achieved.

70’s

• Inflation reared its ugly head in the early eighties and a part of the budget was directed towards fighting the impact of this high inflation.

• By the mid-eighties the rise in the government expenditure started to hurt. Fiscal deficit rose sharply and the entire effort was to curtail that.

80’s

• The budget also focused on development so as to ensure that this requirement was not forgotten in the rush to meet other expenditure.

• There was also a lot of emphasis on social spending in the budget to provide benefits to the poor in the country.

80’s

• The country faced a serious crisis that led to pledging of gold. Foreign exchange reserves fell to record lows. Tackling this was a big target in the early budgets of the nineties.

• Liberalisation of the economy and freeing up of the license raj were some of the other notable goals that the budget sought to achieve.

90’s

• Inflation reared its head once again and there were also efforts to tackle this because it hurt the poor and the needy the highest.

• Recovering from the very slow growth early in the decade also took a lot of space in the budget and this also turned out to be a success.

90’s

• The next round of reforms was laid out in the budget in the first few years of the new century.

• Fiscal adjustment and increasing the growth targets were some of the important goals that the budget aimed at during the decade.

21st Century

• Sustaining the high growth rates in the economy became a challenge for the budget as the world slipped in a big economic recession following the bust of the housing bubble.

• Increasing efforts were made by the budget to bring down tax rates and increase compliance.

• The Indian economy was also sought to be integrated with the world economy in the budgets.

21st Century

Budget Simplified

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