Back1979-80: Charan Singh Budget
Mint picks 10 budgets which stand out for one or the other of these reasons
PremiumHistorically budgets fall in two buckets. Those that are situational—dominated by an unravelling challenge and, hence, largely reactionary—and the few out-of-the-box essays seeking to reset the economic agenda. Mint picks 10 budgets which stand out for one or the other of these reasons.
More than any other Union budget in history, this one presented by Charan Singh, India’s then deputy prime minister and finance minister, changed the face of fiscal federalism. It also came in the backdrop of a volatile oil market, triggered by the Iranian Revolution in 1979.
■ The budget accepted the recommendations of the 7th Finance Commission and absorbed the impact of doubling the share of states in Union excise duties to 40% from 20%.
■ The budget that year also sowed the seeds of indirect tax reforms in India by accepting some of the recommendations of a committee on the subject headed by L.K. Jha.
■ The value added tax first appeared in this budget, albeit in an embryonic form. The budget extended pro forma credit facilities in respect of duty on inputs in the manufacture of finished products.
■ Charan Singh also raised the central excise duty on petrol and diesel after the Organization of the Petroleum Exporting Countries, or Opec, increased prices.
■ Singh also revised prices upwards for Indian postal services. While the inland letter’s price was raised by five paise, the price of an ordinary telegram of 8 words was raised by 25 paise.
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