The budget or finance bill is the most comprehensive report of government finances. The government submits to parliament a report of their revenues and expenses undertaken during the financial year. It also contains budget estimates for the upcoming fiscal year. The Ministry of Finance, along with the NITI Aayog and the Comptroller & Auditor General of India, or the CAG, are the key players in
Budget preparation.
The first Indian Budget was presented in 1860 by a finance member of the India Council under the british Viceroy in India. James Wilson, a Scot, was the founder of The Economist weekly and the Standard Chartered Bank.
Over time, the budget has taken on new traditions. Finance ministers over the decades have added their distinctive flourishes. India has had 35 finance ministers including Indira Gandhi and Rajiv Gandhi who doubled up as FM, Manmohan Singh, Yashwant Sinha and Jaswant Singh.
Independent India’s first finance minister, industrialist Shanmukham Chetty, who was also the Diwan of Cochin state and Constitutional Adviser to the Chamber of Princes, presented India’s budget on November 26, 1947.
The union Budget used to be a thick document. The contents in both English and Hindi. That gave way to separate versions and a slimmer document. The documents that accompany the Budget, apart from the Minister’s speech, were in white for decades. Eventually, the expenditure budget, the receipts budget, the financial statement, memorandum and associated documents were all marked in different colours — red, orange, blue — making the job easier for those looking for information specifically on particular aspects of the Budget.
Earlier, the railway budget was presented separately from the rest of the general budget. The merging the railway budget with the Government of India’s budget was an annual discussion but nothing was done for years. A separate railway budget was also based in the convention. Following the recommendations of a committee headed by Sir William Acworth, he chairman of the Eastern Railway back when the Brits ruled India.
The committee back then claimed that the Railways, a commercial organization that did its own thing, needed a separate budget. This was done in 1924 and survived 90 years. This tradition was abandoned by Jaitley in 2016. The Railway Budget, which never did have any constitutional or legal requirement, was phased out. Apparently, railway reforms of any sort in India are as slow as the trains.
Other important structural changes were made to the budget speech in 2017. The distinction between ‘plan’ and ‘non-plan’ expenditure was removed. Also, with GST, the Budget speech will see some more changes. The speech has two parts Part A and Part B.
Part A usually contains allocations to different sectors and schemes, while Part B contains tax proposals, both direct and indirect. GST has subsumed more than 12 different taxes including VAT and Excise Duty. This will mean that Part B of the budget speech will be fairly shorter than earlier. Unless of course, the govt wants to tomtom the GST.
Source: moneycontrol.com