5 keywords in the Budget that tell a bigger story

Can we infer something about how a particular year was depending on how frequently a word was used in a Finance Minister’s speech?

February 29, 2016 11:02 am | Updated September 02, 2016 06:01 pm IST

Finance Minister Arun Jaitley arrives at the Parliament.

Finance Minister Arun Jaitley arrives at the Parliament.

The speeches delivered by Finance Ministers presenting Union Budgets are often met with unenthusiastic reactions from the common man given their heavy usage of economical terms and verbose construction of sentences. But on closer inspection, they can tell interesting stories when you know what you’re looking for. Take the case of something as simple as agriculture. How often does it warrant mention in speeches, given that it is still considered the backbone of our economy to a large extent? And can we infer something about how a particular year was depending on how frequently it was mentioned in a Finance Minister’s speech? 

Here’s what we found out for five such terms:

1. Agriculture 

A sector that once contributed over half of the country’s GDP (in the early 50s) and is currently a 17-something-per-cent shareholder of the larger pie, its first mention is in the second paragraph of the 1947-48 speech by India’s first Finance Minister R.K. Shanmukham Chetty:

“In general, it may be said that, while India is much the stronger at present in industrial production and mineral resources, Pakistan has some advantage in agricultural resources, especially foodstuffs.”

In a later part of the speech, Chetty says: 

“The chief factor (for economic deterioration) … is the general decline in agricultural and industrial production in the country due partly to the wide prevalence of communal disorders and generally to the increasing Industrial unrest.” 

It finds mention over 13 times (1966-67 speech by Sachindra Chaudhuri) — the highest frequency for the term — and rightly so because it was the year after a failed monsoon and prevailing drought.

“At the beginning of the current fiscal year, it was our hope that the substantial Improvement in agricultural production and national income which had taken place in 1964-65 would make it possible to bring about a corresponding improvement in the general economic situation.

This expectation, however, has not been realised as a result of a number of unforeseen adverse happenings. Apart from the unprecedented failure of monsoons during the current year, we have had to reckon with hostilities on our borders and a pause in foreign aid.”

Fast forward to Arun Jaitley’s February 2015 speech, and the term found mention only 11 times and this was the last of what was planned for this sector: 

“While the farmer is no longer in the clutches of the local trader, his produce still does not command the best national price. To increase the incomes of farmers, it is imperative that we create a National agricultural market, which will have the incidental benefit of moderating price rises. I intend this year to work with the States, in NITI, for the creation of a Unified National Agriculture Market.”

2. Education

Something that is of infinite importance for progress in any society, Chetty in 1947 decided to allocate “Rs. 12 crores for expenditure on nation building activities such as education, medical, public health, the running of scientific institutions and scientific surveys, aviation, broadcasting etc.”

Of course, Rs. 12 crore was a substantial amount in those days (using an inflation calculator one can estimate it would be worth more than Rs. 800 crore in today’s money). Fast forward to Mr. Jaitley’s last Budget speech and we find this: 

“Illustratively, I have allocated Rs. 68,968 crore to the education sector including mid-day meals, Rs. 33,152 crore to the health sector.” 

3. Television (sets)

The word first finds mention in Indira Gandhi’s 1970-71 Budget speech:

“I propose, very reluctantly, to withdraw the exemption in favor of television sets and impose a duty of 20 per cent ad valorem.”

Highest frequency in the speech of S.B. Chavan (1989-90): 

“The Members of the House are aware that television has offered considerable entertainment to our people. It would be in the fitness of things that television viewers who derive such entertainment should contribute more to the resources of Government and thereby to the programmes of national development.”

And so, excise duty on black & white sets were increased (to a maximum of Rs. 500 per set) and for color sets, “a duty of Rs. 2250 per set without remote control, Rs. 2500 per set with remote control and Rs. 4000 per set having the facility of ‘Picture in picture’.” 

4. Cars

First appearance in the 1948-49 speech by Chetty:

“While it is of course true that over a considerable field consumption taxes reach a wider section of the population than direct taxation, consumption taxes on such luxuries as motor cars … do not touch the life of the ordinary man.” Contrasting that with today’s scenario, it is highly doubtable that a Finance Minister would pass that as a comment in his/her Budget speech. 

Highest frequency (1962-63 speech by Desai):  

“It is proposed to raise the rate of import duty on cars from 100 to 150 per cent. The specific duty of Rs. 6000 is, however, being done away with so as not to discourage import of small or used cars in genuine cases. Though there are no regular imports of cars, some cars continue to come into the country, on Customs clearance permits. As their number is small, their outside value is high and when they are sold, there are very large profits. The proposed increase in duty will reduce these profits and will make import of cars a little less attractive. The revenue from this will be about Rs. 25 lakhs.”

5. Defence

First appearance: (1948-49 by Chetty)

“The total expenditure for the year is estimated at Rs. 197.39 crores, of which Rs. 92.74 crores is on account of the Defence Services.” That’s nearly 47% allocation.

Highest frequency (Dec 1971 speech by Y.B. Chavan, proposing additional measures for maximum mobilisation of resources for the Bangladesh Liberation War): 

“The defence budget during that year was set to the tune of about Rs. 1,620 crore but the government was also straddled with providing relief to refugees from Bangladesh and dealing with a devastating cyclone that hit coastal Orissa.” 

Jaitley (2015 Feb): “I have provided adequately for the needs of the armed forces. As against likely expenditure of this year of Rs. 2,22,370 crore the budget allocation for 2015-16 is Rs. 2,46,727 crore.” That’s just approximately 14% allocation form the total expenditure (over Rs. 17.7 lakh crore).

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