Every year on 1 February, when the eyes of the entire nation are fixed on the Parliament House and the Finance Minister gives the Budget speech, very few people know when the tradition of budget making started in India and how historic and challenging its first chapter was. Today, when expectations are at their peak regarding the Union Budget 2026, it is interesting to know that the country’s first budget was presented at a time when India was trying to recover from the wounds of independence. The first budget in India was presented on April 7, 1860, during British rule. At that time, the budget was presented by James Wilson, the then Finance Minister of India. This budget was not prepared keeping in mind the interests of common Indians, but keeping in mind the economic needs of the colonial administration. But the real historical turning point came when the country became independent and the first Union Budget of independent India was presented.
First budget of independent India
The first budget of independent India was presented on 26 November 1947 by the then Finance Minister Sir R.K. Presented by Shanmukham Chetty. This budget came at a time when the country was grappling with the tragedy of partition, and there was an atmosphere of riots, displacement and economic uncertainty all around. This budget was not for the entire year but only for a period of seven and a half months, as the new financial year was to begin from April 1, 1948.
One currency, two countries
An astonishing fact related to this first budget is that it was decided that both India and Pakistan would use the same currency by September 1948. At the time, the economies of the two countries were deeply interconnected, and it was natural to take time for complete separation.
first budget figures
In this budget, the total estimated revenue of independent India was Rs 171.15 crore, while the fiscal deficit was Rs 204.59 crore. Despite limited resources and extraordinary circumstances, the government tried to lay the foundation for administration, rehabilitation and development.
Change in Finance Minister
Later, Sir R.K. Shanmukham Chetty resigned from the post of Finance Minister, and John Mathai took over the responsibility. John Mathai presented the budgets for 1949–50 and 1950–51. The special thing is that the budget of 1949-50 was the first budget prepared for a united India, in which all the princely states were included.
Lesson for today:
Today, as Budget 2026 discusses tax relief, jobs and growth, the story of India’s first Budget reminds us of the difficult circumstances in which India’s economic journey began and how today’s strong economy is built on the same foundation.