Union Budget 2025: When Was India’s First Budget Session Held? Know History of the Indian Budget

Union Budget 2025: Every year, the central government announces the Union Budget for the whole year, with modifications in the common man’s daily expenditures, allocation of funds for the growth and development of specific sectors, and other changes. While many of us know what actually comes in the Budget session and how the govt decides it, the first ever Budget was introduced during the British rule in India. As the Budget 2025 approaches, let us know more about the history of India’s Union Budget and other important details.

Indian Union Budget History 

James Wilson, a Scottish businessman, submitted the first Indian budget on February 18, 1869. However, the concept of an Indian budget was adopted on April 7, 1860, two years after the East India Company’s management was transferred to the British Crown. Following the First War of Independence in 1857, Wilson resigned his parliamentary seat in Britain and was sent to India by Queen Victoria to reform the country’s financial structure, establish a tax system, and introduce a new paper currency.

First Indian Budget

James Wilson introduced the income tax, which is still an important source of revenue for the government today. According to Sabyasachi Bhattacharya’s book “The Financial Foundation of the British Raj,” when Wilson arrived in India, officials were considering direct levies. A license tax bill was supposed to be introduced, but it wasn’t in good form. When Wilson arrived, he repealed the previous measure and introduced two new ones: the income tax and the licensing bill. 

In his financial statement, he announced that people with a yearly income of less than Rs 200 would be free from paying taxes. To determine the status of monthly expenditure accounts, an appropriation audit based on the English model was implemented. As India’s first finance officer, James Wilson was expected to tackle the subcontinent’s post-mutiny financial woes, but he died of dysentery in Kolkata in August of the same year he presented the inaugural budget.

India’s First Budget After Independence

The country’s first post-independence budget was announced on November 26, 1947. Ramasamy Chetty Kandasamy Shanmukham Chetty was the first Finance Minister of Independent India. The Planning Commission was established during his tenure. Ramasamy Chetty mentioned in his speech that the budget statement was intended for seven and a half months. He estimated income of Rs 171.15 Cr and revenue expenditure of Rs 197.39 Cr.