India’s First Mini Budget: A Historical Insight

As Finance Minister Nirmala Sitharaman prepares to present the Union Budget on February 1, 2025, marking her eighth consecutive budget, it is valuable to reflect on India’s budgetary history and key moments. One such significant event in the country’s economic history was the presentation of India’s first Mini Budget in 1956.

What is a Mini Budget?
A Mini Budget is an exceptional budget presented outside the regular annual budget cycle, often in response to unique economic conditions or political situations. For instance, an interim budget may be introduced during election years, and a new government may present a Mini Budget to introduce additional fiscal measures once it assumes office.

India’s First Mini Budget
India’s inaugural Mini Budget was presented on November 30, 1956, by T.T. Krishnamachari, the country’s fourth Finance Minister. Following the tenure of C.D. Deshmukh, Krishnamachari delivered a detailed 5,000-word speech to address the significant economic challenges of the time.

Economic Context of 1956
The 1956 Mini Budget was introduced amidst economic difficulties, including:

• Rising inflation, which was affecting the economy.
• Decreasing foreign exchange reserves, which were a serious threat to financial stability.

To tackle these issues, Krishnamachari announced new taxation proposals through finance bills to stabilize the economy and restore balance.

The Downfall of T.T. Krishnamachari
Although Krishnamachari was recognized for his financial expertise, his career was marred by controversy. In 1958, he was forced to resign following the findings of the Justice Chagla Commission, which accused him of corruption.

The Nehru Era and Budget Presentation
After Krishnamachari’s resignation, Prime Minister Jawaharlal Nehru took on the Finance portfolio. In the absence of a dedicated Finance Minister, Nehru himself presented the Union Budget for the fiscal year 1958-59, demonstrating his versatility as a leader.

The Second Mini Budget: A Comeback by Krishnamachari
Less than a decade later, T.T. Krishnamachari returned to the position of Finance Minister. In August 1965, he presented the second Mini Budget, marking his return to a crucial role in India’s economic policy.

Krishnamachari’s Legacy as Finance Minister
Throughout his tenure, Krishnamachari presented a total of six budgets, two of which were Mini Budgets. Despite the controversies surrounding his career, his contributions to India’s financial policies were vital in shaping the country’s early economic framework.