The budget for fiscal year 1959 was to be originally presented by TT Krishnamachari.
However in a surprise move, TTK resigned from the ministry over an alleged scam. Revered jurist MC Chagla lead a single-member inquiry into the role of TTK in the Haridas Mundhra Scandal. The scandal involved sale of duplicate shares of Life Insurance Corporation. Besides offering Chacha Nehru an opportunity to present the budget, TTK set record, becoming the first politician in independent India to resign.
For 1958-59, with no Finance Minister in his cabinet, Chacha Nehru had to rise to the occasion.
Presenting his budget, Chachaji said, "According to custom, the Budget statement for the coming year has to be presented today. 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."
Baring for a few minor tweaks, the overall theme was retained from that of the previous year. And Nehru himself admitted that it was a "pedestrian" budget. Things such as wealth tax and estate duty, both which Krishnamachari had previously introduced found mention in Nehru's budget.
In terms of budgetary economics Nehru said revenues were projected at Rs 763.16 crores and said expenditures were to be maintained at Rs 796.01 crores. The deficit was pegged at Rs 32.85 crores.
The big revenue headers were Railways, that was to offer a dividend of Rs 49.58 crores. Customs was to add Rs 170 crores, excise duties would offer Rs 260.45 crores. Duties on Sugar, Cloth and tobacco would add Rs 41.48 crores. Income tax was to offer Rs 217 crores while wealth tax would offer Rs 12.5 crores.
One of the major headers in the Expenditure section was Defence services that had been earmarked with an expenditure of Rs 278.14 crores. Nehru's maiden budget speech spoke on nation-building and development services. A total of Rs 130.09 crores was reserved for this. In the previous year's budget, this had been allocated at Rs 109.62 crores.
Provision for education was reserved at Rs 29.63 crores, higher by Rs 5.48 crores while there were grants to states, Rs 2.51 crores for scholarships and Rs 4.32 crores for grants to University Grants Commission. There was also a provision for Scientific Research, which was stepped up by Rs.3.7 crores and that for industries and Supplies by Rs. 1.62 crores.
Speaking on gift tax, Nehru admitted that it was not new but stressed the need for one. He said that the tax would be levied on the donor on the value of all gifts made during a year. Gifts of value of Rs 10,000 in one year will be exempt and Beyond this there was a duty to be imposed. Gifts to one's wife had a ceiling of Rs 1 llakh. In regard to the Wealth Tax, the major change proposed was to exempt a foreign citizen from payment of the tax on his foreign wealth, even though he could be resident. There were also a few tweaks in the Estate Duty. Some of the other taxation proposals that find mention are a hike in cement duties.
In his budget speech, Nehru said, "The tax on gifts will bring in Rs. 3 crores, the changes in the Estate Duty Rs. 50 lakhs, the increased duty on cement Rs. 2.24 crores and the adjustments in the excise duty on cloth Rs. 83 lakhs, a total sum of Rs. 6.57 crores, of which Rs. 50 lakhs will accrue to the States. The reduction in the excise duty on vegetable products will involve a loss of Rs. 24 lakhs leaving the net additional revenue at Rs. 5.83 crores. This will leave a final deficit of Rs. 27.02 crores which I propose to leave uncovered."
The best part of the speech however is Nehru's convincing oratory skills in the conclusion of his budget speech. He said, "This budget statement is a minor event in our march forward. We have to look at it in the perspective of what we have to do and what we have to achieve, Above all, we have to realise that our success depends on ourselves and not on others, on our own strength and wisdom, on our unity and cooperation and on the spirit of our people whom we are privileged to serve."
The later budgets were delivered by Morarji Desai until Krishnamachari assumed his office in the finance ministry in 1963.