Union Budget 2024: Why India's' budget presentation was moved to February 1

India's Union Budget is presented on February 1 annually. This tradition began in the year 2017, until which the budget presentation took place on the last day of February every year

Union Budget 2024: Less than a month is left until the Narendra Modi government will present its 10th budget (interim) on February 1, even though Finance Minister Nirmala Sitharaman made it clear in December that there wouldn't be any "spectacular announcements".

This is likely on account of the impending Lok Sabha elections due in April-May, following which the newly elected central government will present the comprehensive Union Budget for the next financial year (FY25).

An interim budget, as the name suggests, is presented when the elections are around the corner, to help the incumbent government manage expenses till the polls.

 

Why is Union Budget presented on February 1

However, the government didn't always present the budget on February 1. Previously, India's Union Budget was presented at the end of February. More so, till 1999, it was presented at 5 PM on the last working day of February, which was later shifted to 11 AM. It was only in the year 2017, when the first post-GST (Goods and Services Tax) budget was decided to be introduced on February 1, shifting from the colonial-era tradition. The then Finance Minister Arun Jaitley introduced this budget.

Preponement of the Budget allows funds to be distributed to the various ministries in time in a bid to ensure that the proposals take effect from the beginning of the new financial year, which commences in April. The government says the streamlining of the budgetary process has been done to increase efficiency and implement a better utilisation of the funds.

Earlier, when the budget was proposed in February end, a three-stage Parliament approval process used to be completed sometime in mid-May. This would result in the government departments being able to spend the allocated money for various projects only from August-end or September after the monsoon season ended.

India's first-ever budget

On an unrelated note, India's first-ever budget was introduced on April 7, 1860, by the Scottish economist and politician James Wilson from the East India Company, who presented it to the British Crown. Meanwhile, the first budget of independent India was presented on November 26, 1947, by then finance minister R K Shanmukham Chetty.

(With PTI inputs)