The History Of A Budget

The History Of A Budget

Come February every year, almost everyone – from farmers to financial markets to businesses to employees to petty laborers – eagerly looks up to the Finance Minister, expecting a share in what he presents, that is budget, in the House.

According to the Constitution of India, it is mandatory on the part of the President to ensure the budget is presented each year. Since India became independent, there was no occasion or year when the budget had not been presented.

Budget, like many other words in English, has roots in Latin. The word means Leather Bag. It has been customary to carry the outlay of proposals in a leather bag and is shown to the media that they (The FM and other ministers of the same ministry) haven’t forgotten in bringing the papers.

Funny as it may sound it happened so in England once to a minister who came to the House for getting the papers. (This time you can witness this customary ritual on February 1, the FM posing with Leather Bag to the show it to the media)

The budget presentation is not an invention. It’s been there since the 17th century when a British official used the accounts of revenue receipts and expenditures of the State so as to divert the resources to wage war against its arch-rival France. Then it got developed over the years. And every country or British colony followed the suit.

In British India, it was for the first time presented around 1860 by a Finance Member for British occupied Indian territories and allied princely states. But till 1902 members of the Governor’s Council have no right to amend it, except to express their comments on it.

After India attained freedom from the British, it was John Matthai, the then Finance Minister, presented the budget. Since then on many presented and will present it too in the future.

In total since 1950 onward, a budget represents a country’s financial discipline cutting across the political, administrative, economic and social spectrum.

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