Budget Day Trivia: Why the Union Budget Date Changed to February 1
For decades, the Union Budget of India was presented on February 28 or 29, but in 2017, the government made a historic shift, advancing the date to February 1. This change was made to improve financial planning and execution. But why was this decision taken?
For decades, the Union Budget of India was presented on February 28 or 29, but in 2017, the government made a historic shift, advancing the date to February 1. This change was made to improve financial planning and execution. But why was this decision taken?
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Earlier, the Union Budget was presented on the last working day of February, leaving only a month before the start of the financial year on April 1. This meant that crucial budget approvals often got delayed, affecting fund allocation and implementation. Advancing the date to February 1 allows more time for proper planning and execution before the new financial year begins.
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With the earlier timeline, budget proposals were often passed well into May or June, delaying the rollout of schemes and projects. By shifting the Budget date to February 1, the government ensures that policies can be implemented right from April, leading to better governance and economic planning.
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The previous schedule left ministries and government departments scrambling to utilize funds within a short window. The new timeline provides them with a two-month cushion before the start of the financial year, allowing for better resource allocation, project approvals, and expenditure planning.
Most countries present their budgets well in advance of their financial year to allow a smooth transition. By shifting to February 1, India aligns itself with global best practices, ensuring a structured fiscal policy implementation similar to major economies.
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The tradition of presenting the Budget on the last day of February was inherited from British rule. India followed this outdated practice for decades. The change to February 1 modernized India's fiscal planning, reflecting a more efficient and independent economic system.
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Before 2017, the Railway Budget was presented separately, a practice that began in 1924. However, the government decided to merge it with the Union Budget for better financial integration. To facilitate this transition smoothly, the Budget date was also shifted to February 1.
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The new timeline helps the government focus on policy execution rather than policy delays. Ministries and departments can finalize spending priorities, complete pending approvals, and ensure smooth financial operations well before the next fiscal year begins.
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