[ Sange Tsering ]
Few offices in India’s post-independence governance have carried as much weight or invited as much scrutiny as that of the finance minister. From navigating food shortages and foreign exchange crises to steering liberalisation and today’s digital-centred growth, each minister has left a clear imprint on the nation’s economic trajectory.
Yet the journey has been marked not only by achievements but also missteps; some technical, some political, and some avoidable. As India moves towards its centenary of independence, revisiting these decades reveals a story of ambition, course correction, and resilience.
The foundational years (1947-1966) were defined by scarcity, institution building and socialist thinking. RK Shanmukham Chetty, India’s first finance minister, presented the inaugural budget in 1947, focusing on stabilising a war torn, partition hit economy. John Mathai followed, advocating industrial expansion but resisting overcentralisation, famously resigning over the creation of the Planning Commission. It was CD Deshmukh’s tenure (1950-56), however, that laid the institutional bedrock strengthening the RBI, supporting the second Five Year Plan and shaping an early welfare-oriented fiscal identity. Yet this period was not without errors. Over reliance on central planning, slow industrial licencing and weak taxation networks sowed seeds of future inefficiencies.
The 1960s saw deficits rising and India turning to foreign aid. Morarji Desai’s stern fiscal conservatism reined in inflation, but his rigid stance on taxation and foreign capital often clashed with emerging global trends.
The 1970s marked by the Emergency and the oil shocks forced finance ministers such as YB Chavan and C Subramaniam to navigate inflationary spirals and foreign exchange stress. Subsidies increased, public sector dominance expanded and protectionism hardened. By the 1980s, finance ministers like R Venkataraman and Pranab Mukherjee cautiously introduced partial liberalisation, softening industrial licencing, rationalising tariffs and encouraging technology imports. Still, structural weaknesses remained: high fiscal deficits, a closed economy, and limited competitiveness.
But India’s watershed economic moment came in 1991. Confronted with the balance of payments crisis and near bankruptcy, Dr Manmohan Singh, under prime minister Narasimha Rao, liberalised the economy, dismantling the Licence Raj, opening markets to foreign investment, devaluing the rupee, and initiating tax reforms. In one budget speech that changed the nation’s destiny, Singh repeated the words of Victor Hugo “No power on earth can stop an idea whose time has come.” The impacts were immediate and transformational, as private enterprise flourished and exports diversified in ways the Indian economy had never seen before. Foreign investment surged, bringing in capital, technology, and global confidence. This momentum expanded middle-class consumption, creating new markets and aspirations across urban and semi-urban India.
With these shifts reinforcing one another, GDP growth accelerated sharply, marking the beginning of a new economic era. Yet, even this golden era had long-term challenges: greater vulnerability to global shocks, widening inequality, and incomplete reforms in labour, land, and banking.
The early 2000s saw India enjoying strong growth. Yashwant Sinha simplified taxation and laid the foundation for the VAT regime. Jaswant Singh pushed infrastructure and telecom expansion. Under P Chidambaram, the economy touched growth rates previously unseen, aided by global liquidity and domestic confidence. The FRBM Act (2003) sought to enforce fiscal discipline.
But mistakes accumulated over the years, as excessive lending by public sector banks laid the foundations of the NPA crisis, subsidies ballooned beyond sustainable levels, structural reforms were delayed, and revenue projections often proved over-optimistic. The 2008 global financial crisis further exposed these weaknesses, and although stimulus packages were necessary to stabilise the economy, they ultimately contributed to persistent inflation and widening fiscal deficits.
2014-24 was seen as ‘digital push and controversies’ but had brought sweeping changes. Arun Jaitley ushered in the goods and services tax (GST) – India’s most significant tax reform while leading financial inclusion through Jan Dhan, Aadhaar linked services, DBT and the Insolvency and Bankruptcy Code (IBC). Post 2019, Nirmala Sitharaman oversaw one of the most turbulent economic periods in recent history, marked by Covid-19, global inflation, geopolitical shocks and severe supply chain disruptions. Her tenure introduced several significant measures, including the 2019 corporate tax cuts, record capital expenditure on infrastructure, the rollout of production linked incentive (PLI) schemes, a major expansion in digital payments and a strong push towards semiconductor manufacturing and green energy investment.
Yet her period in office has also witnessed notable blunders, some substantive and others political. These included the widely criticised 2019 remark attributing the automobile slowdown to millennials preferring Ola and Uber, communication lapses during the initial Covid relief announcements, ongoing GST compliance burdens and revenue volatility, perceived opacity around disinvestment plans and delayed responses to rural distress, and MSME liquidity challenges. While these missteps did not derail the broader economy, they highlighted the crucial importance of clearer fiscal communication and more consistently evidence-based policymaking. Arunachal became he first state from where PM Narendra Modi announced the GST Utsav.
Budgets of the last few years reflect a clear shift from short-term stimulus to long-term capacity-building, with strong emphasis on green energy, technology infrastructure, logistics upgrades and domestic manufacturing. India now positions itself for sustained 7% plus growth and a more assertive global leadership role. Yet significant structural challenges persist: the tax base remains narrow, informality continues to dominate large sectors of the economy, state finances are increasingly strained, inviting private players in the nuclear domain (AEB 2025), climate risks, etc, pose mounting threats and private investment recovery still appears uneven.
Across 78 years, India’s finance ministers have delivered notable successes, building key financial institutions, steering a complex democracy through repeated crises, liberalising markets, expanding digital infrastructure, and strengthening the country’s global economic presence. But they have also faltered at critical moments, hampered at times by excessive bureaucracy, policy unpredictability, untimely or out-of-touch statements, slow progress on banking reforms, and missed opportunities in manufacturing and export competitiveness. The journey has ultimately been one of constant negotiation between growth and equity, ambition and caution, and the ever-present interplay of politics and economics.
India’s story is ultimately one of resilience. No finance minister has worked with perfect information or unlimited resources. They have steered the economy through wars, droughts, oil shocks, global recessions, pandemics, and shifting political landscapes. As India approaches the 100th year of independence, the finance minister’s role becomes even more crucial: guiding the nation through technological transformation, climate transitions, and the aspirations of 1.4 billion people. The ledger of history will record not just the policies enacted, but the courage, clarity and conviction with which they were delivered. No doubt, history will remember some finance ministers with deep respect for their vision and courage, while others will be recalled more cautiously, their tenures marked as lessons in what to avoid. The entire nation, along with the states awaits the presentation of the budget in Parliament and the respective state assemblies. There is a quiet hope that the union finance minister’s vision will offer renewed optimism for the country, just as the state finance minister seeks to leave a meaningful and lasting imprint on the history of Arunachal Pradesh. Time alone will reveal how these aspirations unfold. (The contributor is a PhD research scholar)
