Budget 2019: How budget by first woman finance minister Indira Gandhi looked like
New Delhi, July 03: India's first full-time woman Finance Minister Nirmala Sitharaman is all set to table her maiden budget on July 5 and expectations from this budget are high. As of now, Indira Gandhi is the only woman Finance Minister who has presented the Union Budget of India.
Indira Gandhi, as a finance minister, tabled the Union Budget on February 28, 1970. Now, Nirmala Sitharaman will become the second woman finance minister following the presentation of Union Budget 2019.
Indira Gandhi, who won the 1971 Lok Sabha elections against all odds battling a split in the Congress and a united Opposition with her "garibi hatao" (eliminate poverty) slogan. Poverty elimination required economic reforms, strengthening educational and training institutions and rapid growth in agriculture and industrial sectors.
Gandhi, who was referred to as goongi gudiya (the dumb doll) appeared nervous and shaky while presenting the budget. The budget seemed a taxed-up budget as it seemed socialist in its approach.
The Budget speech
In her Budget Speech, Indira Gandhi had stated, "It is generally accepted that social, economic and political stability is not possible without the growth of productive forces and the augmentation of national wealth. Also, that such growth and increase in wealth cannot be sustained without due regard to the welfare of the weaker sections of the community. Therefore, it is necessary to devise policies which reconcile the imperatives of growth with concern for the well-being of the needy and the poor. Measures have to be devised which, while providing welfare, also add momentum to productive forces."
"Apart from providing for a significantly higher Plan outlay, the Budget for 1970-71 makes special provision for a number of schemes which combine an element of social welfare with future growth potential," she said.
"Taxation is also a major instrument in all-modern societies to achieve greater equality of incomes and wealth. It is, therefore, proposed to make our direct tax system serve this purpose by increasing income taxation at the higher levels as well as by substantially enhancing the present rates of taxation on wealth and gifts," she added.
Here are the few excerpts from Indira's budget
- Direct and indirect taxation, increase in property taxes, import duties were hiked.
- Budgetary deficits were pegged at estimated Rs.290 crores as against the Budget Estimates of Rs.254 crores.
- The marginal rates of income taxation was increased progressively in all personal incomes above Rs.40,000 per year. With the addition of the surcharge at 10 per cent, the maximum rate of 93.5 per cent will now be reached in the slab over its. 2 lakhs as against 82.5 per cent, in the slab over Rs.2.21 lakhs at present.
- Ordinary wealth tax were enhanced. The rates varried from 0.5 per cent to 3 per cent.
- The exemption limit of Rs 10,000 was lowered to Rs 5,000. The duty on TV sets too had been hiked with an imposition of 20 per cent levy.
- Exemption limit at the lower end was revised from Rs 4,000 - 4,800 to Rs 5000.
- Minimum Deductions for salaried class too was revised from Rs 5 per month to Rs 250.
- The minimum deduction of Rs 20 per month was made available to those who traveled to work on a bicycle or by public conveyance or by any other mode.
- The duty on cigarettes was enhanced with the increase ranging from 3 per cent to 22 per cent ad valorem depending on the value slabs.
- Personal income ceiling was revised to Rs 5,000 and an exemption for taxable personal income had been raised.
Gandhi, who rose to power using the slogan 'garibi hatao' rolled out anti-poverty programmes that turned India from a Revenue Surplus nation to Revenue Deficit country.
But for Nirmala the challenges are different. The economic situation has changed drastically and priorities have shifted. Toll promises made during elections are now commitments, and the objective has changed, too, from wooing voters to putting the economy back on track. Let us see what awaits the common man on July 5, when the new finance minister presents the budget.