Budgets that shaped India: A journey through the Country’s Fiscal Milestones

Since 1947, India has gone through a series of economic ups and downs to become the country it is today. From a nation shattered by poverty and policy paralysis, India now stands as the fourth-largest economy in the world and is poised to overtake Germany to claim third place within half a decade. In achieving this, the role played by the Union Budget is far from small. For example, if one imagines the country as a ship hovering in a rough sea, the budget is the compass that guides the ship towards land. In other words, a budget decides the course of a country’s economy, both in monetary terms and in terms of policies.

On 1st February 2026, India will present her 93rd Union Budget since independence, including 12 interim budgets presented before the general elections. Until 2016, India followed a British‑era practice of presenting the Budget on the last working day of February. This had a lot of problems, since the financial year started on April 1, which meant ministries, businesses, and taxpayers had very little time to act on the new policies and tax rules.

In 2017, the then Finance Minister, Late Shri Arun Jaitley, presented the Budget for the first time on February 1. Since then, the government has kept the early date. The objective is to give everyone more time to plan before the new fiscal year begins.

In the context of global uncertainties and geopolitical volatilities fueled by the trade war initiated by the Trump Administration through tariff impositions, the Union Budget 2026 is expected to be a trailblazer for the Indian economy.

As we prepare to witness another historic budget on the 1st of February, let us understand the various milestone budgets through which India has passed over the years.

The First Budget of India in 1860

Budget, while present in its varied terminologies in India since time immemorial, took its present‑day structure when it was first introduced by Mr. James Wilson, a renowned Scottish economist and politician under the East India Company, who presented the Budget of India on the 7th of April 1860 to the then British Crown. The first budget was introduced in India against the backdrop of the financial stress faced by the British Government following the 1857 Rebellion, known as the Sepoy Mutiny or the First War of Independence. The Budget also saw the introduction of Income Tax in India.

The First Budget of the Independent India in 1947

Shri. R K Shanmukham Chetty on the 26^th of November 1947, presented what is known as the first Budget of Independent India. The budget covered a period from the Independence Day on 15^th August 1947 to 31^st March 1948, focusing on partition relief, ensuring food-sufficiency amidst significant post-partition challenges, and allocating a large share of expenditure towards defense. The historic budget laid foundation stone for India’s economic planning, and he road ahead.

The Black Budget of 1973

The Union Budget of 1973, presented by the then Finance Minister Shri. Yashwantrao B Chavan is generally termed as the Black Budget of India, or the Budget of Crisis. The budget received this infamous nickname because of the massive fiscal deficit of Rs 550 crore, an unprecedented figure/ amount which highlighted the country's economic challenges. This resulted due to many reasons. The most important of them being the 1971 India-Pakistan war which drained Indian resources. The post-war expenses were also huge, including the enormous task of rehabilitating over 10 million refugees, which took a huge toll on the country’s exchequer. The defence costs rose to a staggering Rs 1,600 crore. Adding to the challenges, the 1972 drought also ripped apart the agricultural sector and left rural India reeling under food shortages. India's urban areas were also not safe; power shortages and rising unemployment were a major issue there.

The Carrot & Stick Budget of 1986

On 28^th February 1986, Shri. Vishwanath Prathap Singh, the then Union Minister of Finance presented before the Parliament house, a budget which was termed as the first move towards dismantling the licence-raj in India. The budget presented by him provided both incentives and penalties, thus earning the nickname, “The Carrot & Stick Budget”. Under the budget, Mr. Singh initiated steps to dismantle the License Raj and reform the tax structure. It introduced MODVAT (Modified Value Added Tax) to reduce cascading taxes, boosted plan outlay by 20%, and significantly increased apportionments for anti-poverty programs. The budget focused mainly on reforming tax compliance through a mix of incentives for compliance and strict measures against tax evasions.

The Epochal Budget of 1991

The dictionary meaning of the word “epoch” refers to “an event or a time marked by an event that begins a new period or development”. In that sense, the 1991 Union Budget of India, presented by the then Finance Minister Dr. Manmohan Singh is truly worthy to the nickname, the epochal budget. The 1991 Union Budget was presented at a time when India was facing a serious balance-of-payments crisis. It marked the start of economic liberalization by cutting customs duties and opening-up the economy, thus earning the nickname. These steps laid the foundation for major reforms that transformed India’s economic direction and helped integrate it with the global economy.

The Dream Budget of 1997

In the year 1997, using the principles of Laffer Curve, the then Union Finance Minister, Shri. P Chidambaram took bold measures to increase tax collections by lowering the tax rates. Laffer Curve is a theory developed by renowned American economist and author Mr. Alfred Laffer, illustrating that, raising tax rates does not always increase government revenue. After a point, higher taxes can actually reduce collections because people work less, hide income, or avoid taxes.

Keeping this in view, Shri. Chidambaram unleashed major tax reforms including slashing of maximum marginal income tax rate for individuals and corporates, introduction of voluntary disclosure of income to curb black money, slashed customs duty from 220% to 150%, and simplified the excise duty structure.

The Millennium Budget of 2000

The budget at the turn of the millennium, presented by the then Union Finance Minister, Shri. Yashwant Sinha, was called the Millennium Budget. This was because it focused on encouraging technology and the IT sector by cutting customs duty on computers and related products, making them cheaper and more accessible. It reflected India’s push to prepare for the digital age and attract investment in new-age industries.

The Rollback Budget of 2002

According to the Marriam-Webster Dictionary, the word rollback means “to cause to retreat or withdraw”. In that sense, the 2002 budget presented by Shri, Yashwant Sinha can be termed as the rollback budget. This was because many of its proposals faced strong public and political opposition. Measures such as higher taxes and user charges led to protests, forcing the government to withdraw or soften several decisions.

The Once-in-a-century Budget of 2021

The Union Budget of 2021, presented by the honourable Finance Minister, Smt. Nirmala Sitaraman was referred as the once-in-a-century budget for many reasons. Presented in the aftermath of the COVID-19 pandemic, the worst health and economic crisis the world had faced in generations, the 2021 Union Budget responded to an economy that had shrunk, with jobs lost and businesses under severe stress. Instead of sticking firmly to deficit targets, the government chose to spend more to revive growth, with an understanding that such large spending was necessary in such an exceptional situation.

This marked a clear shift from the usual focus of the government on saving money to spending for recovery, with an emphasis on long-term growth rather than short-term fiscal discipline. The union budget of 2021 prioritized areas like infrastructure, healthcare, banking reforms, privatization and asset monetization, targeting to build a strong foundation for the future rather than offering quick populist relief, while also openly acknowledging a high fiscal deficit to reflect transparency and realism.

The Sunday Budget of 2026

The Union Budget of 2026, to be presented on the 1^st of February 2026 will be remembered as a chapter inked in golden letters in the history of India. Historically, no Union Budget of the country happened on working days. While some budgets were presented on Saturdays, Sunday was never an option for the presentation of Budget. The budget 2026 is different in this context.

India for the first time in its history will present a budget on a Sunday. This is also the first time since the shift in budget presentation day to February 1^st, the date falls on a Sunday.

For the finance minister the budget is of many records, the first budget presented by any minister on Sunday, the 9^th consecutive budget of the minister, the second highest number of budgets presented by any minister since 1947, the highest number of consecutive budgets presented by any minister since independence, and so on. But with all that, the budget is a litmus test for both the economy as well as the government represented by the minister. In a time, when geopolitical volatilities creating uncertainties and global economic shrinkage, the 2026 Union Budget of the Government of India plays a significant role in supporting and boosting India's economic growth.

The budget should play a pivotal role, not just in tackling the childish war of tariffs imposed by the US Administration, but to steer the economy to the world’s third largest economy title.