Last Updated:
The 1973-74 Union Budget, presented by Union Finance Minister Yashwantrao Chavan, revealed an unprecedented fiscal deficit of Rs 550 crore, a staggering amount for that era
The 1973-74 budget presented by then Finance Minister Yashwantrao Chavan revealed fiscal deficit of Rs 550 crore. (News18 Hindi File)
The Union Budget of India will be presented in Parliament on February 1. Union Finance Minister Nirmala Sitharaman will deliver the budget speech and provide an account of the nation’s finances.
In this context, let us look back at the 1973–74 budget, which holds a notorious distinction in the history of Indian budgets as the ‘Black Budget’. This budget reflected the significant economic challenges of the time and the government’s policies, which profoundly impacted the country’s financial situation.
After the India-Pakistan War in 1971, the Indian economy faced significant strain. War expenses had depleted the government treasury. Exacerbating the situation, the country experienced natural disasters, including drought, which severely impacted agricultural production. This confluence of events led to a decline in government revenue and a simultaneous increase in expenditure, ultimately resulting in a widening budget deficit.
The 1973-74 budget presented by then Finance Minister Yashwantrao B. Chavan revealed a shocking fiscal deficit of Rs 550 crore, a colossal sum at the time and unprecedented in scale. This revelation exposed the precariousness of India’s economic situation. During his budget speech, Chavan attributed the deficit to the prevailing drought, stating, “the situation in the country has worsened due to drought, there has been a huge decrease in food grain production, which has increased the budget deficit.”
The government also made some important announcements in that budget. These included a provision of Rs 56 crore for the nationalisation of coal mines, insurance companies, and the Indian Copper Corporation. The government argued that nationalising coal mines would help meet the increasing demands of the energy sector. The ‘Black Budget’ had a profound impact on the country’s economic policies and plans, prompting the government to cut expenses and adopt financial discipline.
Expectations from the 2025 Union Budget
India is gearing up for the first Union Budget presentation of the Narendra Modi 3.0 government, for the upcoming financial year (FY 25-26). Finance Minister Nirmala Sitharaman will present the budget in Parliament on February 1, 2025.
Anticipation surrounds this budget presentation, with discussions taking place across various sectors. Individuals from different industries are putting forth a range of demands. Experts are advocating for income tax exemptions, while industry stakeholders are seeking relief measures.
There are reports that there might be relief for income tax payers. Moreover, the first estimates released by the government indicate that India’s GDP is likely to grow by 7.3 per cent in the current financial year (2023–24).
