Throwback Budget 1951: The budget Surplus

Just four years after fighting a bloody war with arch rivals Pakistan and surviving through the aftermath of the partition India’s economy was quick on its feet. The budget of 1951, that came only a few months after the nation became republic, was presented by Chintaman Dwarakanath Deshmukh.

CD Deshmukh, who was conferred knighthood in 1944, was the first Indian to be appointed the governor of the Reserve Bank of India under the British Raj. He was also one the five members of the Planning Commission that was constituted in 1950. He succeeded John Mathai as the Finance Minster after Mathai resigned in 1950.

Under Deshmukh the period was marked by high demand for home-made goods such as jute goods, raw cotton, cotton waste and raw wool. Import regulations were gradually relaxed to allow essential commodities into the country. This period also witnessed a marked reduction in expenditure compared to revenue receipts unlike the previous years. The budget for 1950-51 provided surplus of Rs 71 lakhs.

The total expenditure for 1951-52 was estimated at Rs.375.43 crores of which Defence Services will account for Rs.180.02 crores and civil expenditure for Rs.195.41 crores.

The exchange receipts during the year ending September 1950 amounted to Rs 638 crores and payments to the tune of Rs.572 crores, showing a net surplus of Rs.66 crore. This was the first time that the country showed a surplus after gaining independence.

“In the rapidly changing conditions all over the world he will indeed be a rash man who can hazard a guess as to the future. But I have little doubt myself about the inherent strength of our financial position and I have every confidence in the ability of our people to sustain and support the Government in whatever measures may be necessary to maintain the finances of the country in a sound position”, Deshmukh had said.