Men who shaped up India's economy

Indiatimes News Network

India had as many as 30 finance ministers after it secured independence from imperialist British rule in 1947. And, these gentlemen shaped up India’s economy which has grown in size to about US$ 800 billion. India has also emerged as the fastest growing economy after China and become a major provider of services and goods to the world. www.economictimes.com takes down the memory lane introducing every single individual who held finance portfolio. The story of India’s evolution as a major economic power is an interesting saga intertwined with political happenings. While three Prime Ministers held the coveted portfolio of Finance, only four ministers presented more than five budgets. A brief profile of these men is given below.

Nawabzada Liaquat Ali Khan (1896 - 1951) was an Indian Muslim politician and a leading member of the All India Muslim League (AIML). He played an influential role in the partition of India and the creation of Pakistan. He was closely involved in the negotiations over the form of independence to be granted to India after World War II.

When the Indian political leadership asked the Muslim League to send its nominees for representation in the interim government, Liaquat Ali was asked to lead the League group in the Union Cabinet. He was assigned the finance portfolio by the first Indian Prime Minister Pandit Jawahar Lal Nehru. Acknowledged as Jinnah's "right hand" and as such Liaquat was the obvious choice to become prime minister of independent Pakistan in 1947. He went on to become the country's senior most leader after Jinnah's death in 1948.

India’s First FM R K Shanmukham Chetty (1947-1948): Independent India's first Budget was presented by the country's first finance minister, R K Shanmukham Chetty, on November 26, 1947. And, that was an interim Budget. It was a review of the economy and no new taxes were proposed as the budget day for 1948-49 was just 95 days away. He resigned shortly. It is believed that he was asked to resign by Jawaharlal Nehru, the Prime Minister of India due to a minor dereliction of duty by a subordinate official, so as to ensure probity.

K C Neogy: 1948 K C Neogy then took charge. He was the second Finance Minister of free India. He held office for just 35 days and didn't get an opportunity to present a Budget.

John Mathai (1948-1950): John Mathai was an economist who served as India's first Railway Minister and subsequently as Finance Minister, taking office shortly after the presentation of India's first Budget, in 1948. He presented two budgets for 1949-50 and 1950-51. He resigned after presenting the 1950 Budget following protests against vesting large powers with the Planning Commission and P C Mahalanobis.

C D Deshmukh (1950-1956): C D Deshmukh was also the first Indian Governor of the Reserve Bank of India. He presented an interim budget for 1951-52. The first general elections in post-independence era were held between December - February 1952. Deshmukh was given the Finance portfolio after the new ministry assumed office. He felt honoured to present the first budget to the first-time elected members of Lok Sabha. Hindi crept into the budget documents beginning 1955-56. His stewardship of the country's finances was marked by prudence and humane perspective. He provided the much desired vision to deal with the changing financial needs of a young, independent and under-developed country like India.

He made significant contributions to the formulation and implementation of the country's First and Second Five Year Plans that provided strong base for the years ahead. He was responsible for ensuring social control of the financial structure such as the enactment of a new Companies Act, and nationalisation of the Imperial Bank of India and life insurance companies. He resigned from the Union Cabinet after protesting separation of Mumbai from Maharastra.

T T Krishnamachari (1957-1958): T T Krishnamachari took over from him. He found that the calculations made in the budget for 1955-56 had gone awry. So, on November 30, 1956 in a five-thousand-word speech he described the changed economic situation and underlined the need to levy fresh taxes even before the next budget was presented. The Second General Elections were held in February-March 1957 and he presented an interim budget for 1957-58 on March 14, 1957 and the full budget subsequently. He was instrumental in setting up the country's three major steel plants and financial institutions like IDBI, ICICI and UTI. He introduced path-breaking tax reforms during his stint as Finance Minister. Krishnamachari had to resign in Feburary 1958 when one man Justice Chagla Commission found him guilty of corruption.

Jawaharlal Nehru (1958-1959): Following Krishnamachari's resignation, the then Prime Minister, Jawaharlal Nehru, himself took charge of the Finance portfolio and presented the budget for 1958-59. In the opening para of his budget speech Nehru had said ... "According to custom, the budget statement for the coming year has to be presented today (February 28, 1958). By an unexpected and unhappy chain of circumstances the Finance Minister, who would normally have made this statement this afternoon is no longer with us. This heavy duty has fallen upon me almost at the last moment."

Morarji Desai (1959-1964): Morarji Desai became the next Finance Minister and he presented the maximum number of budgets so far- ten. They included five annual and one interim budget during his first stint. In his second tenure, he presented three full budgets and one interim as Finance Minister and Deputy Prime Minister. His annual budgets were for the years from 1959-60 to 1963-64 and the interim budget for 1962-63.

T T Krishnamachari (1964-1966): After the first stint of Morarji Desai, Krishnamachari once again became the Finance Minister for the second time. He presented the budgets for 1964-65 and 1965-66. Embarking upon measures needed for providing social security, Krishnamachari expanded the pension scheme to cover family members of the deceased government servants by introducing a new Family Pension Scheme in 1964. He planned schemes like the Rajasthan Canal Schemes, Dandakaranya and Damodar Valley Projects. The Neyveli Lignite Projects owe their existence to the fillip given by Krishnamachari. He resigned in late 1966.

Sachindra Choudhuri (1966-1967): Sachindra Choudhuri presented the budget for 1966-67 after the resignation of T T Krishnamachari. It was an interim arrangement.

Morarji Desai (1967-1969): After the fourth General Elections in 1967, Morarji Desai once again became the Finance Minister. This was his second stint. The annual budgets for three years 1967-68 to 1969-70 and the interim budget for 1967-68 were also presented by him. The interim budget for 1967-68 was on account of the General Elections in March 1967. He was the only Finance Minister to have had the opportunity to present two budgets on his birthday - in 1964 and 1968. He was born on February 29. Desai resigned in July 1969 in protest against the nationalisation of major banks by an ordinance on a Saturday evening. He felt social control of banks would regulate their functioning and make them accountable.

Indira Gandhi (1969-71): After Morarji Desai's resignation, Indira Gandhi, the then Prime Minister assumed the Finance portfolio. So far, she has been the only woman Finance Minister.

Y B Chavan (1971-1975): Following the Fifth General Elections in March, 1971, Y B Chavan became the Finance Minister. He presented the interim budget for 1971-72 and the final budgets for four years - 1971-72 to 1974-75.

C Subramaniam (1975-1977): C Subramaniam presented the budgets between 1975-76 and 1976-77. He cast the widest net to increase revenue through excise.

H M Patel (1977-1979): After the Seventh General Elections in March 1977, the first non-Congress Ministry under the then Janata Party assumed office at the centre. Morarji Desai was elected as the Prime Minister. H M Patel held the Finance portfolio. He presented the interim budget for 1977-78. He also presented the annual budget for 1978-79.

Chaudhary Charan Singh (1979-1980): The budget for 1979-80 was presented by Chaudhary Charan Singh who was also Deputy Prime Minister.

Ramaswamy Venkataraman (1980-1982): After the seventh General Elections in January, 1980, the Congress Party returned to power. Venkataraman presented the interim and final budgets for 1980-81 and the annual budget for 1981-82. Later he rose to become the country's Vice President and President.

Pranab Mukherjee (1982-1984): Pranab Mukherjee presented the annual budgets for 1982-83, 1983-84 and 1984-85. He was the first Rajya Sabha member to hold the Finance portfolio.

V P Singh (1985-1987): After the Eighth General Elections in 1984, V P Singh presented the annual budgets for 1985-86 and 1986-87. There was no interim budget since the elections were held in December 1984. He was part of the ministry headed by Rajiv Gandhi.

He oversaw the gradual relaxation of the license raj that Rajiv had in mind. He also gave extra power to the Enforcement Directorate of the Finance Ministry, that was given charge of tracking down tax evaders. Following a number of high-profile raids on suspected evaders - including Dhirubhai Ambani - Rajiv Gandhi was forced to sack him as Finance Minister, possibly because many of the raids were conducted on industrialists who had supported the Congress financially in the past.


Rajiv Gandhi (1987-1988): Rajiv Gandhi presented the budget for 1987-88. He was the third Prime Minister to present a budget after his mother, and grand father. The exercise in zero-based budget began in 1987-88. The zero-based budgeting is a process of review, analysis and evolution for each budget request in order to justify its inclusion or exclusion from the integrated whole budget before it is finally approved. In India, the zero-based budgeting was implemented in three phases - one third in the first year, two thirds in the second year and fully from the third year. It is a continuous process.

N D Tiwari (1988-1989): N D Tiwari presented the budget for the year 1988-1989.

S B Chavan (1989-1990): S.B. Chavan did the budget exercise for 1989-90. He also served twice as the Chief Minister of Maharashtra.

Madhu Dandavate (1990-1991): After the General Elections in November 1989, the then Janata Dal Government's Finance Minister Madhu Dandavate presented the annual budget for 1990-91.

Yashwant Sinha (1991-1992): Following subsequent political developments, Yashwant Sinha became the Finance Minister and presented the interim budget for 1991-92.

Manmohan Singh (1991-1996): Manmohan Singh served as the governor of the Reserve Bank of India in the late 1980s, and was given the portfoilo of finance in 1991 by Prime Minister Narasimha Rao. He presented the final budget for 1991-92 in July 1991. This was the first occasion when the interim and final budgets were presented by two ministers of two different political parties. The next four annual budgets of Shri Manmohan Singh had an orientation different from the one followed till then.

The economic liberalisation package pushed by Singh and Rao opened the nation to foreign direct investment and reduced the red tape that had previously impeded business growth. The liberalisation was prompted by an acute balance-of-payments crisis whereby the Indian government was left without sufficient reserves to meet its obligations, and had begun preparations to mortgage its gold reserves to the Bank of England in order to obtain the cash reserves needed to run the country. As such, he was instrumental in making of an opened economy. He reduced the peak import duty from 300 plus to 50 per cent. He will be remembered best for making the rupee convertible in current account in just two phases. Introducing the concept of 'service tax' was his idea.

Jaswant Singh (1996): He served as Finance minister in the short-lived government of Atal Bihari Vajpayee, which lasted just from May 16, 1996, to June 1, 1996.

P Chidambaram (1996-1998): The general elections held in 1996, paved way for a coalition government supported by the left parties. This came as a big break for Chidambaram, who was given the key cabinet portfolio of Finance; this put him in the limelight. The final budget for 1996-97 was presented by P Chidambaram of the then Tamil Maanila Congress.

It was the second time that interim and final budgets were presented by two ministers of different political parties. Following a constitutional crisis, the I.K. Gujral Ministry was on its way out and a special session of Parliament was convened only to pass Shri Chidambaram's 1997-98 budget. It was passed without a debate. Although the coalition government was a short-lived one (it fell in 1998), it showed Chidambaram's competence as Finance Minister, a factor which was to lead to his re-appointment to the same key portfolio under Prime Minister Manmohan Singh in 2004.

Yashwant Sinha (1998-2002): After the General Elections in March 1998, Yashwant Sinha got the Finance portfolio in the first ever BJP-led Atal Bihari Vajpayee Government. He presented the interim and final budgets for 1998-99. After the 13th General Elections in 1999, he became the Finance Minister once again. He had presented four annual budgets - from 1999-2000 to 2002-2003. Yashwant Sinha presented the budget for 1999-2000 in the forenoon. Earlier, the budgets used to be presented at five in the evening as a pre-independence custom introduced by British establishment. While Manmohan Singh concentrated on making imports flexible, Sinha paid great attention to rationalization of excise and reduced the slabs from 11 to one.

Jaswant Singh (2002-2004): In July 2002 he became Finance Minister again, switching posts with Yashwant Sinha. He served as Finance Minister until the defeat of the Vajpayee government in May 2004 and was instrumental in defining and pushing through the market-friendly reforms of the government.

P Chidambaram: Incumbent Chidambaram became Minister of Finance again in the congress party-led United Progressive Alliance government on May 24, 2004. He is hard-working and widely believed to be honest.