First budget of independent India
Budget: The country’s general budget is going to be presented in Parliament on 1 February 2026. Like every time, this time too, from the common man to the industry, everyone’s eyes are fixed on the Finance Minister’s box. Will we get tax relief or will we be hit by inflation, this is the question in everyone’s mind. But amidst the noise of this huge budget, have you ever wondered what was the condition of the country’s coffers when India became independent? Today, when we talk about the trillion dollar economy, it is difficult to believe how small the first budget of independent India was. Today we will take you through the pages of history to the period when the country’s ledger was written independently for the first time.
How was the first budget?
Under Article 112 of the Indian Constitution, it is called ‘Annual Financial Statement’, which contains a complete account of the earnings and expenditure of the government. But the tradition of budget in India had started long before independence. India’s first budget was presented on 7 April 1860 during the British rule. At that time it was introduced by James Wilson.
However, the moment we were waiting for came in 1947. The country became independent on 15 August and just three months later, on 26 November 1947, the first Union Budget of independent India was presented in the Parliament. This historic responsibility was given to the then Finance Minister Sir R.K. Played by Shanmukham Chetty. This budget was not prepared for the entire year but only for seven and a half months (15 August 1947 to 31 March 1948).
First ledger presented amid partition
At that time the country was going through the pain of partition and communal riots were raging at many places. Handling the country’s economy in such a delicate and stressful environment was a big challenge. Sir R.K. When Shanmukham Chetty presented the budget, he had big responsibilities like settling the displaced people and security of the borders.
One of the most interesting things about this budget was that despite Pakistan becoming a separate country, it was decided that India and Pakistan would share the same currency till September 1948. Later, after the resignation of Sir Chetty, John Mathai took over as Finance Minister and presented the budget of 1949-50, which in true sense was the budget of a united India made by combining all the princely states.
Total revenue was Rs 171.15 crore
Now let’s come to those figures which will surprise you in today’s times. In a country where projects worth thousands of crores are common today, the total revenue estimate of the first budget of independent India was only Rs 171.15 crore. Yes, only Rs 171 crore. At the same time, the total expenditure of the government was estimated to be around Rs 197.29 crore.
If seen from this perspective, the first budget of the country was a deficit budget, in which the fiscal deficit was about Rs 24.59 crore. Since the security of the country was the biggest issue immediately after independence, a large part of the budget was spent on army and defence. According to the data, the defense allocation was Rs 92.74 crore, which was about 46 to 50 percent of the total expenditure.