India’s budgets over the years, in numbers

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New Delhi: The Union Budget, which sets out a roadmap for India’s fiscal and financial reforms, is a highly anticipated event every year. Over the years, various governments have tried to strike a balance between economic growth and social equality through the allocation of resources in their budgets. Finance Minister Nirmala Sitharaman has a similar task for her in the upcoming budget. Mint gives you interesting data points on budgets over the decades.

parting pains

THE ECONOMIC burden of the massive humanitarian crisis created by partition was evident in the first budget for independent India presented by RK Shanmukham Chetty in November 1947. The defense forces played a critical role in the rehabilitation of the refugees. The country was also in the midst of a military conflict with Pakistan. As a result, a staggering 47% of total spending went to defense. The fiscal deficit reached 21% of spending.

FM score

TWENTY-SIX finance ministers have presented 89 Union budgets so far since independence. Morarji Desai presented 10 of them, the most among all. P. Chidambaram comes next with nine budgets, followed by Pranab Mukherjee with seven, spanning the early 1980s and 2009 to 2012. Current Finance Minister Nirmala Sitharaman will present her fifth budget on Wednesday, which which will put her in seventh set on the list. Four finance ministers became prime ministers.

small pockets

THIS IS the proportion of ministries that traditionally have a miniscule allocation in the general budget spent. In the last 14 years, 37 ministries and departments had a share of less than 1% in the Center’s expenses. This includes the ministry of social justice and empowerment and the department of atomic energy. On the other hand, an average of more than 50% of disbursements over a decade has gone to just two ministries. Finance and defense accounted for 39% and 13% in the 2022 budget.

Not so female friendly

WITH THE aim of tracking budget allocations through a gender lens, gender budgeting was first introduced in 2005-06. Historically, about 5% of funds have been spent on plans that benefit women, and the proportion stood at almost 4% last year. The plans are of two types: those that are fully specific to women (Part A) and those that partially address women’s development needs (Part B). Part B schemes dominate the gender budget with 84% participation in 2022-23.

income taxes

Central government tax revenue has hovered at almost 7% of GDP since fiscal 2010, after crossing 8% of GDP for a few years. The non-tax revenue share has also declined since then, staying mostly below 2% and now just above 1%. For FY23, the government had budgeted for a 9.6% increase in gross and net tax revenues over revised estimates for FY22, and collections are expected to exceed estimates. Non-tax revenues were budgeted to decrease by 14%.

understanding it

THE ANNUAL financial statement also presents economic growth forecasts each year. Over the last decade, the budget overestimated nominal GDP six times, while underestimating economic output in the other four years. In the 2020-21 pandemic hit, the government had set a nominal GDP of $224.9 trillion, but the final figure turned out to be $198 billion, 12% less due to confinement.

thumbs down

HISTORICAL PATTERNS suggest that stocks have traded weakly on budget day. In the last 20 budgets, including the interim budget and the full annual in election years, Sensex has rejected 11 times, while advancing another nine times, with the highest gain of 5% in 2021. Markets typically do the same, as only a few of the key sectoral indices tend to end in the green on D-Day. However, autos, FMCG and banks clapped in more than 55% of cases.

budget curiosity

THIS ANNUAL financial exercise, which sets the tone for political and financial reforms each year, derives its name from the French word bougette, meaning leather briefcase. The highly publicized event generates a lot of interest as Indians keep an eye out for tax breaks and other important announcements. Google search interest for the word “budget” last year was highest in major state economies like Maharashtra and Karnataka, and Delhi.

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