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Page 1 of 3 24.03.1971 Was Also an Interim One by the New FM Budgets Interim – What after the Hat Trick? FEBRUARY 16, 2009 THE first ever budget of the Union of India was an interim Budget presented by the first Finance Minister, R.K. Shanmukham Chetty on 26.11.1947. This covered a period of seven and a half months from the 15th August, 1947 to the 31st March, 1948. With the division of the country and the emergence of two independent Governments in place of the old Central Government, the Budget for the year 1947-48 passed by the Legislature last March ceased to be operative. Although under the transitional provisions of the constitution, Government could authorize the expenditure necessary for the rest of the financial year, it was felt that it will be in accordance with the public wish that a Budget should be placed before the representatives of the people at the earliest possible moment. And that happened in November 1947. Customs was expected to yield a Revenue of Rs. 50 Crores in that year and the actual receipts were Rs 3 Crores higher. The next Interim Budget was presented by CD Deshmukh on 29.02.1952. Though this was presented as usual on the ‘Budget Day”, it was termed as an interim one which Dr. Deshmukh explained as, “This is only an interim budget although it has been prepared as usual for a full year. Its main purpose is to place before Parliament an account of the finances of the Central Government for the current year and the prospects for the coming year on the existing basis of revenue and expenditure so that the House may know the general background against which it has to deal with the demands which will be placed before it for a vote on account to meet the expenses of the administration till the new Parliament considers and passes the budget for the whole year. The budget which I am now presenting will be presented again in due course to the New Parliament with such changes as the new Government may consider it necessary. Meanwhile, Government propose to ask the House only for a vote on account to meet the anticipated expenditure during the first four months of the next year and to approve of the continuance of the existing measures of taxation.” Dr. Deshmukh returned to present the regular budget on 23.05.1952 TT Krishnamachari presented the Interim Budget on 19.03.1957 with the remarks; “I rise to present the budget of the Central Government for the year 1957-58. In 1952, under similar circumstances, my predecessor presented an interim budget. Its main purpose is to place before Parliament, an account of the finances of the Central Government for the current year and to obtain from the House a vote on account to meet Government’s expenditure until the new Parliament considers the budget again.” He presented the regular budget on 15.05.1957 Morarji Desai presented the Interim Budget on 14.03.1962 with the remarks, “I rise to present the budget of the Central Government for the year 1962-63. The main purpose of this budget is to place before Parliament an account of the finances of the Central Government for the current year and to obtain from the House a vote on account to meet the expenditure of the Government until the new Parliament considers the budget again.” By this time actually the elections were over and Congress party, as was the practice in those days, came back to power and Morarji remarked, “In the recent elections, the nation has for the third time affirmed its confidence in our Plans and our policies. We shall have many Plans to fulfil before we reach our goal.” Morarji went on to present the regular budget on 23.04.1962. The next interim budget was also after the elections in 1967. By this time the new Parliament and Government were very much in place but there was hardly any time for a full fledged budget. As Morarji explained in the interim budget presented on 20.03.1967, “On this occasion, however, we are meeting under special circumstances. As Honourable Members are aware, a vote on account for enabling the Government to carry on its business during the financial year 1967-68 has to be considered and passed before the 3 1st of March. But the new Government at the Centre and the Honourable Members assembled here cannot, between now and the end of March, give full consideration to the budgetary requirements for the whole of the coming year. The Government, therefore, wishes to bring before this Honourable House in a few weeks time a Budget outlining the proposals for the full year, 1967-68.” Morarji went on to present the regular budget on 25.05.1967 in his elevated capacity as Deputy Prime Minister and Finance Minister. Indira Gandhi went in for advanced General Elections in 1971 which she won decisively and the post election budget presented by YB Chavan on Page 1 of 3 24.03.1971 was also an interim one by the new FM. Chavan presented his regular budget on 28.05.1971. Indira Gandhi did not hold the elections in 1976 as was required but actually held it in 1977 which she lost and HM Patel as the Finance Minister of the first non-congress government in India presented his Interim Budget on 28.03.1977. Patel actually presented the figures of his predecessor and explained, The Budget and the demands for grants that are being made available to Honourable Members were prepared on the basis of the directions given by the previous Government. I would like to make it clear at the outset that though these have been circulated, they do not reflect our philosophy, policies, and programmes. [Apparently Indira Gandhi had planned to come back to power] There was no time since we assumed office to recast these estimates and to print the Budget documents afresh. The annual financial statement and the demands for grants prepared earlier will serve the limited purpose of fulfilling the Constitutional requirements for taking a Vote on Account before the 31st March, 1977. This will enable Government to meet essential expenditure during the first four months of the ensuing financial year. Patel presented his regular budget on 17.06.1977. The economist that he was, he thought the Janata victory against Indira Gandhi was as economic as a political verdict. He explained, “The massive mandate that the people of India gave the Janata Party in March this year was not just a vote against authoritarianism. It was also a manifestation of our people’s desire for a reorientation and a reshaping of our economic policies so as to bring about speedy elimination of poverty and destitution. He concluded, My party has emphasised liberty. But liberty does not mean freedom to starve and freedom to feel unwanted. Large-scale poverty and unemployment degrade those who have to suffer them, and debase those who tolerate them. We owe it to ourselves to see that these twin scourges are eradicated as quickly as possible. We have a long and a difficult road ahead of us.” The ecstasy did not last long as the Government did not last long and Madam Indira Gandhi came back to power in 1980 with a massive mandate. R. Venkataraman presented the Interim Budget of the new Government on 11.03.1980 and lambasted the Janata misrule, The massive mandate that our Party has received from the people of India is clearly a mandate to pursue with renewed vigour various programmes for social and economic development initiated by us before 1977 but which were disrupted during the thirty-three months of the Janata-Lok Dal rule. Instead of building further the strong and resilient economy which we had left behind in 1977, they have allowed it to drift, through inaction and mismanagement, into stagnation. Our commitment to repair this damage, to work tirelessly for rapid economic development, for removal of poverty and social inequalities and for the implementation of the 20-point programme is firm and irrevocable. However, the state of the economy that we have inherited from the Janata-Lok Dal rule of thirty-three months is such that we shall need some more time to assess the damage suffered by the economy and to evolve a coherent medium-term strategy for revival and restoration of its health. This, of course, does not mean that we will not take effective steps to deal with the pressing short-term problems until such a consistent medium-term strategy has been evolved. Later in my speech, I shall outline briefly the various steps which our Government has taken in the last eight weeks to restore a measure of confidence and stability to the economy. Clearly, there is need to adopt many other measures to get our country moving again along the cherished path set out by Gandhiji and Jawahar Lal Nehru. For the outline of such an integrated approach, I plead with the House to wait until I come forward with the regular Budget for 1980-81 in a few weeks. He also admitted that like Patel he too did not have enough time, “The interim Budget and the Demands for Grants being made available to Honourable Members reflect by and large the continuation of ongoing expenditure sanctioned earlier and certain minimum unavoidable changes. They do not reflect adequately the present Government’s policies and programmes because since we took office we have not had enough time to formulate these. We feel that the Plan framed by the previous Government is inadequate to fulfil the policies and programmes set out by us in our election manifesto and on the basis of which we have received a massive mandate.
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