The Union Budget of India, presented by the Finance Minister in Parliament, has seen significant shifts in both its date and timing over the years. February 1 is now synonymous with ‘Budget Day’ but it was not so earlier. The change came into existence in 2017 when the presentation date was moved from the last working day of February to February 1.
Why was the Union Budget’s Date Changed?
For decades, the Indian Union Budget was presented on the last working day of February. This practice originated during the British colonial rule era, when British India would align its budget announcement with the timing in Britain, considering the time difference.
In 2017, the then Finance Minister Arun Jaitley announced that the Indian budget date would be on February 1 instead of the last working day of February. This was done to give the government more time to prepare for and implement new fiscal policies before the start of the new financial year on April 1. Earlier presenting the budget at the end of February left only about a month for the government to prepare for the new policies. Also, by moving the new Union Budget date to February 1, the Indian government sought to establish its own identity, independent of colonial traditions.
Implications on Industries
The timing of the budget has direct implications for sectors like agriculture. By presenting the budget earlier, the government could announce critical agricultural policies and allocations well in advance of the sowing season, enabling farmers to make informed decisions about crop planning and resource allocation.
Advancing the date helped stakeholders such as state governments, businesses, and investors plan their financial activities better. With earlier announcements, they could anticipate and adapt to policy changes, tax modifications, or new schemes more effectively.
Administrative and procedural delays often hampered the timely rollout of projects and schemes. The two-month lead time facilitated by the new schedule allowed ministries and departments to finalize their expenditure plans and operational plans without rushing.
Union Budget Time Change
Before the date change came into effect, the timing of the budget presentation was also revised. Previously, the budget was presented at 5 pm, which coincided with the morning in the UK, allowing British officials to review it during their daytime. The revised time change came in 1999 under the tenure of the then Finance Minister Yashwant Sinha. The timing was changed from 5 pm to 11 am. This change was not just about convenience but was made to facilitate a more thorough analysis of the budget by stakeholders, including Members of Parliament, economists, and the business community.
The rescheduling of time from 5 pm to 11 am made it possible for hours of discussion, media coverage, and information on the budget details for the general masses. The timing change also aligned with the working hours of not just India but also international markets which react to the announcements. This move thus allowed markets both domestically and globally to respond more in real-time.
Controversy During the Change
The decision to change the Budget presentation date was mired in controversy. A petition was submitted to the Supreme Court which opposed the move claiming that advancing the Budget could enable the government to influence voters with populist promises ahead of state elections. However, the Supreme Court dismissed the petition and said that the Union Budget was not related to state issues and that frequent state elections should not hinder the Centre’s operations.
When Will The Budget Be Announced
The Union Budget Date 2025 is February 1, 2025.