India’s Union Budget has evolved from a basic statement of revenue and expenditure into a powerful instrument of reform, crisis management and institutional change. Over nearly eight decades, budgets have responded to wars, shortages, balance-of-payments crises, liberalisation, technological change, and more recently, governance and compliance reform.
Here is a look at the key milestones that defined this journey.
1947-48 | Free India’s first Budget
Independent India’s first Budget was presented by R.K. Shanmukham Chetty on November 26, 1947. With revenues estimated at Rs 171 crore and expenditure at Rs 197 crore, defence took up nearly half the spending. The Budget reflected the priorities of a new nation—security, administration and economic stabilisation.
1973-74 | The Black Budget
Presented by Yashwantrao B. Chavan amid economic stress, high inflation and global oil shocks, this Budget earned the label ‘Black Budget’ due to a fiscal deficit of Rs 550 crore—large for its time. It underscored the limits of a tightly controlled economy.
1983-84 | Performance-based federalism
Finance Minister Pranab Mukherjee introduced an unconventional idea: allocating central grants to states based on performance rather than population or negotiation. This marked an early attempt to link public spending with accountability.
1985-86 & 1986-87 | Tax reform and dismantling the Licence Raj
V.P. Singh’s Budgets simplified personal income tax, reduced slabs, lowered peak rates and introduced MODVAT to reduce cascading taxes. Dubbed the ‘Carrot and Stick Budget’, it combined incentives with tough action against tax evasion and black money, setting the stage for future liberalisation.
1987-88 | Building market institutions
Prime Minister Rajiv Gandhi’s Budget focused on institutional capacity rather than short-term fiscal tweaks. It sharply raised education spending, laid the groundwork for SEBI, and ended the monopoly of UTI by allowing other mutual funds, steps crucial for capital market development.
1991-92 | The Epochal Budget
Presented by Manmohan Singh during a balance-of-payments crisis, this Budget marked India’s decisive turn towards Liberalisation, Privatisation and Globalisation (LPG). Industrial licensing was dismantled, trade controls eased, foreign investment welcomed, and public sector reform initiated. It remains the most transformative Budget in independent India’s history.
1996-97 | Financing infrastructure
The then Finance Minister, P Chidambaram, addressed India’s lack of long-term infrastructure finance by announcing the creation of the Infrastructure Development Finance Company (IDFC). The Budget also strengthened highways funding and institutionalised disinvestment through a dedicated commission.
1997-98 | The Dream Budget
Chidambaram’s second Budget used the Laffer Curve logic to cut personal and corporate tax rates, simplify excise and customs duties, and reform capital market laws. It explicitly recognised information technology as a growth engine, helping catalyse India’s IT boom.
1999-2000 | Disinvestment and competition
Yashwant Sinha’s Budget formalised a strategic approach to public sector reform, strengthening strategic units and privatising non-strategic ones. It also triggered competition law reform, eventually leading to the Competition Act, 2002.
2003-04 | Fiscal discipline through law
Jaswant Singh introduced the Fiscal Responsibility and Budget Management (FRBM) framework, legally binding future governments to deficit and debt targets. Transparency was institutionalised through mandatory fiscal policy statements, marking a shift from discretion to rules-based budgeting.
2004-05 | Earmarked taxation
Chidambaram introduced the education cess, making taxation visibly linked to social spending. This innovation strengthened the taxpayer–state social contract and was later replicated for other sectors.
2009-12 | Digital foundations
Pranab Mukherjee’s post-global financial crisis Budgets supported the rollout of Aadhaar and early pilots for direct benefit transfers. While incremental at the time, these provisions laid the groundwork for the JAM (Jan Dhan–Aadhaar–Mobile) architecture.
2017-18 | GST and cooperative federalism
Arun Jaitley’s Budget preceded the rollout of the Goods and Services Tax. Beyond tax unification, the GST Council emerged as a landmark institution, embedding consensus-driven federal decision-making into India’s fiscal architecture.
2020-21 | Infrastructure push and new tax regime
Nirmala Sitharaman’s Budget focused on long-term infrastructure planning through the National Infrastructure Pipeline and introduced an alternative personal income tax regime. The speech became the longest in history, reflecting the scale of structural change proposed.
2021-22 | ‘Once-in-a-century’ Budget
In the wake of the pandemic, Sitharaman described the Budget as a “once-in-a-century” moment. It prioritised capital expenditure, healthcare, asset monetisation and privatisation over short-term consumption stimulus.
2025-26 | Compliance rationalisation
The latest Budget deepened tax reform by raising the no-tax income threshold under the new regime, announcing a new Income Tax Bill, revising TDS/TCS thresholds and proposing regulatory decriminalisation through Jan Vishwas Bill 2.0—signalling a shift from control to trust-based governance.
The Union Budget 2026 is scheduled to be presented on February 1, continuing the post-2017 tradition. The upcoming Budget is expected to build on recent themes of capital expenditure, tax simplification and trust-based governance, while responding to emerging challenges such as global uncertainty, climate financing and job creation.
