Union Budget 2025: Why was budget 1973-74 labelled a 'black budget'?

In the last four decades, India has witnessed some landmark budgets. From late Manmohan Singh introducing new economic policies in 1991 to P Chidambaram reducing personal to corporate tax in 1997, the country is a witness to some key "budget eras". 

Introduced by late former PM Manmohan Singh, the new economic policies (Liberalisation, Privatisation and Globalisation) put a demise to License Raj, exposing India's economy to the world. On the other hand, P Chidambaram's presentation in 1997 was termed a "dream budget", for the relief it brought to taxpayers and the introduction of bold reforms that further paved the way for the country's economic growth. 

But do you know that the budget 1973-74 was labelled a "black budget"?

During the Indira Gandhi-led government, the budget was presented by the then-Finance Minister Yashwantrao B Chavan (YB Chavan). It got its famous nickname - black budget - due to the massive fiscan deficit of Rs 550 crores at that time. 

What is a fiscal deficit?

A fiscal deficit can be understood by the difference between the total income and expenditure of a government. Higher the difference, bigger the challenge the government will face and vice versa. 

Why "black budget"?

The 1973-74 budget was termed "black budget" because the Indo-Pak war of 1971 had taken a heavy toll on the country's resources. Given the post-war expenses and rehabilitation task, India's economic resources had taken a back seat. 

As per a report by NDTV, the defence costs rose to a staggering Rs 1,600 crore. On top of that, the 1972 drought, the worst in decades, shattered the country's agriculture sector, leaving the rural India struggling with food scarcity.