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BASIR_Budget_Assisted_Sectoral_Impact_Ranking

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1SPEECH OF SHRI R.K. SHANMUKHAM CHETTY, MINISTER OF
FINANCE INTRODUCING THE BUDGET FOR THE YEAR 1947-1948
I rise to present the first Budget of a free and independent India. This occasion
may well be considered an historic one and I count it a rare privilege that it has fallento me to be the Finance Minister to present this Budget. While I am conscious of thehonour that is implied in this position, I am even more conscious of the responsibilitiesthat face the custodian of the finances of India at this critical juncture. I have no doubtthat in the discharge of my responsibilities I may count on the sympathetic andwholehearted co-operation of every Hon’ble Member in this House.
2. It is not necessary to dwell at any length on the political developments
which have led to the momentous changes that have taken place since the Budget forthe current year was presented to the Legislative Assembly last February. The partitionof the country has cut across its economic and cultural unity and the growth of centuriesof common life to which all the communities have contributed. The long-term effectsof the division of the country still remain to be assessed and we are too near the eventsto take a dispassionate view. When the ashes of controversy have died down, it will befor the future historian to judge the wisdom of the step and its consequences on thedestiny of one fifth of the human race. Whatever might be the immediate politicaljustification of partition, its economic consequences must be fully appreciated if thetwo Dominions are to safeguard the interests of the ordinary man in both the newStates. Regions which have functioned for centuries on a complementary basis havebeen suddenly cut asunder. To have had as a single economic unit a subcontinentpeopled by a fifth of the human race meant by itself a great advantage for the teemingmillions of its population an advantage not fully realised, and perhaps not properlyutilized while the unity was a fact. While it may be a comparatively easy matter tomake the necessary political adjustments resulting from partition, it would requiretime, patience, goodwill and mutual understanding to effect the adjustments necessitatedby the economic consequences of partition. Economically India and Pakistan haveeach points of advantages and disadvantages. In general, it may be said that, whileIndia is much the stronger at present in industrial production and mineral resources,Pakistan has some advantage in agricultural resources, especially foodstuffs. But thecomplementary character of their economies is even deeper than is indicated by thisgeneralisation. The compelling forces of economic necessity must create a friendlyand cooperative spirit between the two Dominions and I trust that, when the presentpassions subside and normal conditions of life return, our people will work together tosecure that, notwithstanding the political division, the economic life of the commonman is not injured. So far as we are concerned, the Indian Union with its populationof nearly 300 millions will be the second largest country in the world next to China.2Our economy is more balanced than that of most countries and, in spite of the setbacks
resulting from partition, our large natural resources and sound financial position willenable us to launch a vigorous economic plan for substantially raising the living standardof our people.
3. The Budget Statement that I am presenting today will cover a period of
7
1/2 months from the 15th August, 1947 to the 31st March, 1948. I may briefly explain
the circumstances in which it has been necessary to present a fresh Budget for this
period. With the division of the country and the emergence of two independentGovernments in place of the old Central Government, the Budget for the current year1947-48 passed by the Legislature last March ceased to be operative. Although under
the transitional provisions of the constitution, Government could authorize the
expenditure necessary for the rest of the financial year, it was felt that it will be inaccordance with the public wish that a Budget should be placed before therepresentatives of the people at the earliest possible moment. There is nothing
spectacular about my statement and there will be no surprises associated with a Budget.
I shall place before the House our estimate of revenue and expenditure for this periodand I shall try to indicate in broad outlines the pattern of the economic life of thecountry and the problems that we will have to face in the immediate future.
PARTITION ARRANGEMENTS
4. Before I proceed to deal with the estimates for the year, the House would
doubtless wish to have a brief account of the broad details of the partition and itsimmediate financial and economic results. As soon as the decision to divide the countrywas taken, a Partition Council, consisting of the representatives of both the futureGovernments, was set up to implement the decision. A number of Expert Committees,on which both the future Governments were equally represented, were appointed underthe aegis of the Partition Council to work out the administrative and other consequencesof the partition. These Committees, some of which are assisted by a number ofdepartmental subcommittees, dealt with all aspects of the problems arising out of thepartition such as the transfer of staff and organisations, the division of assets andliabilities, the arrangements for the coinage and currency In the two Dominions, thetrade and economic relations between them, the continuance of economic controls andso on. These Committees had to complete their work in a matter of four to six weeksand the House will appreciate that in the short time available to deal with these issues,some of which were of the utmost complexity and importance, it was not possible toreach an agreement on all matters before the 15
th August 1947 when the two Dominions
came into existence and took over the Government of their respective territories. Anumber of important points were accordingly left over for further consideration by thetwo Dominions and, in the absence of an agreement between them, for reference to anArbitral Tribunal which has been set up. Among the important issues on which it hasnot been possible to reach an agreement, I may mention the allocation of debt betweenthe two Dominions, the method of discharging the pensionary liability, the valuation3of the Railways, the division of the assets of the Reserve Bank and the division of the
movable stores held by the Army. Some of these issues are likely to go before theArbitral Tribunal and the House will not expect me to say anything further about themat this stage. It was also found impossible to reconstitute the Armed Forces betweenthe two Dominions and allocate the military stores, equipment and installations betweenthem before the 15
th August 1947. For the completion of this work, and for clothing,
feeding and paying the Armed Forces till their reconstitution had been completed, aJoint Defence Council representing the two Dominions with an independent Chairmanand with a Supreme Commander responsible to the Council, has been set up. ThisCouncil was originally expected to complete its work by the 1
st of April 1948 but it is
now hoped that this may be mostly achieved by the end of this month.
5. The long range fiscal, financial and economic relations between the two
Dominions still remain to be considered, but for the rest of the current year theintention is to maintain, within the framework of the agreements arrived at, thestatus quo before the partition. For the present both the Dominions will continue the
existing taxes and duties, there will be a free movement of trade between them
without any internal barriers and the import and exchange controls of the twoDominions will be co-ordinated. It has also been agreed that till the end of September1948 the two Dominions will remain under a common currency system managed bythe Reserve Bank, although from the 1
st April next Pakistan will have its own
overprinted notes and coin. So far as revenue is concerned, each Dominion will
ordinarily retain what it collects but in respect of income tax on assessments for.1946-47 and earlier years and uncollected demands ion the date of the partition anarrangement for sharing the receipts arising in both the Dominions has been arrivedat. In the matter of the division of assets and liabilities, it has not been possible, asI have explained earlier, to reach an agreement on a number of important points
including the allocation of debt and the discharge of the liability for pensions. But
the responsibility for the outstanding liabilities of the old Government could not,obvious reasons, be left vague and undetermined and the only practicable coursewas for one of the Dominions to accept the initial liability to the creditors and settlewith the other the contribution to be made by it. The initial liability for the outstandingloans, guarantees and financial obligations of the late Central Government at the
time of the partition and for the pensions chargeable to it has been placed by law on
the Indian Dominion subject to an equitable contribution from Pakistan. I am surethe House will welcome this decision because in the interests of the credit of boththe successor Governments it is obviously undesirable to leave those who had lentmoney to the previous Government or had earned pensions under it in any doubt asto the Government they should approach for their dues.
REVIEW OF ECONOMIC CONDITIONS
6. There has been a marked deterioration in the economic situation in the
country since March last. The situation has been aggravated by the large scale4disturbances which burst out suddenly, more especially in the Punjab and the North-
West Frontier Province. Apart from the serious economic consequences arising out ofthese disturbances, the human misery that it has caused cannot be measured in termsof money. Thousands of innocent lives have been lost in the two Dominions andmigration on a scale unprecedented in history has taken place. The total number ofpeople involved in this mass migration of population has reached colossal figures oneither side giving rise to problems of great magnitude affecting the economy of thecountry. The Immediate effect of these tragic developments has been to divert theattention of the Government almost completely from normal activities. There has beenan almost total breakdown of the economy of the East and West Punjabs. WhileGovernment have done and are doing everything possible to relieve the immediatedistress and suffering of the refugees, the formulation of long-range plans for theirrehabilitation raises formidable issues both in the financial and administrative fields.These problems have imposed a heavy burden on the Central exchequer, the magnitudeof which it is not possible to assess at present. The budget of the Central Governmentfor the next few years will be materially affected by this unexpected development inthe country, Our whole programme of post-war development will have to be reviewedin the light of this context.
7. The food position has continued to cause grave anxiety both to the
Provincial Governments and the Central Government. The country has just weathereda serious threat of a breakdown of its rationing system. The results of the “Grow MoreFood Campaign” have been on the whole disappointing. During the three years 1944-45, 1945-46 and 1946-47 we had to import from abroad 43.80 lakhs of tons offoodgrains at a cost of over 127 crores of rupees. Daring the current year from Aprilto September we have already imported 10.62 lakhs of tons of foodgrains at a cost ofover 42 crores of rupees. Apart from its being a constant source of anxiety, the relianceon the import of foodgrains from abroad of such magnitude imposes a heavy strain on
the finances of the Government. In recent years our exchange difficulty is almost
entirely due to the import of foodgrains on such a large scale. The meagre exchangeresources available to us are consumed by the purchase of foodstuffs abroad with theresult that we have to impose the most stringent restrictions on the import of manyother essential articles. The various steps necessary for making the country self-sufficient in foodgrains must now claim the highest priority. The implementation ofthis policy must largely depend on the Provincial Governments though the Governmentof India has been and will always be prepared to afford all possible help In thisdirection. We have sent a mission to Australia for the purchase of the surplus wheat ofthat country and we are hoping that we might be in a position to get from Australia asubstantial quantity of wheat during the next year. An expert committee under theChairmanship of Sir Purushottamdas Thakurdas has been examining the food position
in the country and the Committee has submitted an interim report which is receiving
the attention of the Government.58. The deterioration in the economic situation has been particularly noticed
in respect of prices which have shown an unchecked upward tendency. Between the
5th April and the 9th August this year the Economic Adviser’s index number of wholesale
prices rose by 7 points while the Bombay cost of living index advanced by 14 points.Taking the Bombay cost of living index number, while it was 243 in August 1945 it
rose to 267 in August 1946 and reached 284 in August 1947. The chief factor which
has contributed to this development 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. While the supply position has been
deteriorating, increases in wages and salaries given by private employers and the
Government had the effect of augmenting the purchasing power of the people andwidening the gap between current money income and production of goods. The situation
would not have been so bad if the unbalance between money and goods was confined
to these factors only. The most disturbing factor which affects the situation today is
the unspent balances of Individuals and institutions accumulated during the peak years
of Inflation which are being spent on the deferred wants of individuals, repairs toindustry and on the building of trade inventory. In other words, the money demand for
goods Is colossal compared to their local production. While the inflation in war time
was due to the large increases in currency circulation (which rose from Rs. 172 crores
in 1939 to over Rs. 1200 crores at the end of 1945) without any tangible increase in
the supply of goods the present Inflation Is not due to further increase of currency but
to a steady fall in the supply of goods. Although the total available money, whether
currency or bank deposits, has slightly fallen It has spread out more among a widercircle of people in the form of wages and salaries and thus the actual purchasing
power in the hands of those who spend it on ordinary goods has greatly increased. But
the supply of goods has meanwhile fallen and has resulted in an upward trend of
prices. To take only a few examples of the marked fall in internal production, it may
be mentioned that as against a production of 4, 600 million yards of mill made cloth
and 1, 500 million yards of handloom cloth in 1945 the production this year is estimated
at 3,900 million yards and 1,200 million yards respectively. The production of steel inthe current year is also expected to show a drop of nearly 400,000 tons compared with
the peak production of 1,200,000 tons during the war. The production of cement has
also grown steadily worse, the estimated production this year showing a drop of 700,
000 tons over the capacity of over 2
1/2 million tons. In recent months the production
of coal has shown some improvement. but so far as the consuming public is concerned,this has been more than neutralised by difficulties in transport resulting in large
accumulation of coal at the pit heads. Transport and other difficulties explain the drop
in production to some extent, but this is also partly due to labour unrest and strikes.
9. If the economy of this country is to be placed on a sound footing and
maintained in a healthy condition, it is of the utmost importance to increase internalproduction. The chances of increasing the supplies of commodities by imports are not
very bright. Until recently we had a fair chance of sizable imports of consumer goods6from the British Commonwealth countries from accumulated balances, but with the
blocking of the major part of these and the growing adverse balance resulting from thelarge scale importation of foodgrains, the hope of procuring supplies from abroad isgrowing weak. We have therefore to fall back on our own resources. Governmenthave recently announced their scheme for increasing the production of cotton textileswhich, if worked in a spirit of co-operation between industry and labour, will result inthe production of an additional 1,000 million yards over the estimated production ofthe current year. It is intended to explore the possibilities of restoring the level ofproduction in other fields in a similar manner. I am fully conscious of the fact that anypolicy of stabilisation must aim not merely at the increase of production of bothconsumer and producer goods but also at the pegging of money incomes at an agreedand accepted level so that the increased volume of trading resulting from the increaseof production may neutralise the inflationary effects of the large volume of uncoveredmoney income. If this policy is to be carried out successfully, it would require anappreciation of the situation by labour and its wholehearted co-operation.
REVENUE
10. I shall now proceed to a brief review of the financial position for the rest
of the current year. But I must warn the House that the estimates now presented mustbe treated as very tentative as it has not been possible to assess with any measure ofaccuracy the effects of the partition on our revenue and expenditure. I hope it will bepossible to present a more accurate picture when the revised estimates are placedbefore the House along with the budget for the next year.
11. I have budgeted for a revenue of Rs. 171.15 crores and a revenue
expenditure of Rs. 197.39 crores. The net deficit on revenue account in the periodcovered by these estimates will be Rs. 26.24 crores. But the final figure may be higherbecause the actual amount likely to be required for meeting the expenditure inconnection with the relief and rehabilitation of refugees is still very uncertain andsome help may also have to be given to the new Provinces of West Bengal and EastPunjab for which, in the absence of any reliable data, no provision has been included.
12. The revenue receipts, as I have said, are estimated at Rs. 171.15 crores.
Customs receipts have been placed at Rs. 50.5 crores and take into account the effect
of the recent restrictions on imports for conserving our foreign exchange resources.
Income tax is expected to yield Rs. 29.5 crores on account of E.P.T. and Rs. 88.5crores on account of ordinary collections. Although the Niemeyer Award has nowceased to have effect it is proposed to maintain the share of the Provinces in theincome tax revenue at approximately the same level as now after making an adjustmentin respect of the Provinces and parts of Provinces now included in Pakistan. TheCentre will retain Rs. 3 crores out of the Provincial moiety as provided in the originalbudget. On this basis, the divisible pool of income tax is estimated at Rs. 66 croresand the Provincial share at Rs. 30 crores.713. Revenue from the Posts and Telegraphs Department is expected to amount
to Rs. 15.9 crores and the working expenses and interest to 13.9 crores leaving a netsurplus of Rs. 2 crores. The outright contribution of the department to general revenueswill be three-fourths of the realised surplus, the department retaining the balance. Thedepartment will get a rebate of interest on its share of the accumulated profits in thepast which, after allowing for the portion of the department transferred to Pakistan, isexpected to amount to Rs. 71 crores. As regards the contribution from Railways we donot expect anything in the current year. The House is already aware of the reasons forthis from the Railway Budget.
EXPENDITURE
14. 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, the balance representingCivil expenditure. Following the customary procedure, I shall first deal with the DefenceEstimates which remain, as in the past, the largest single item of expenditure.
DEFENCE SERVICES
15. The reconstitution of the Armed Forces in India into two Dominion forces
was an inevitable consequence of the partition of the country. This decision came ata time when the Armed Forces were in the process of rapid demobilisation. While asubstantial measure of demobilisation had already been achieved, the process wasarrested as a consequence of the decision to divide the remaining forces between thetwo Dominions on a communal cum optional basis. The strength of the Army at thetime stood roughly at 410,000 troops. After the completion of the reconstitution of theArmy, India will have roughly 260,000 troops. An organisation under a SupremeCommander, acting under the direction of the Joint Defence Council, was set up and
made responsible for carrying out the reconstitution, and for general administrative

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Sector Classification Dataset: sector_classification/sectorwise_budget_text_extracted.xlsx
Description of columns:
date - Date of Budget
year - Year of Budget
budget_full_text_filename - Name of file having full budget transcript
text_segment - Text excerpts related to the identified sector
sector - Identified sector (TARGET)

Sector Ranking Dataset: sector_ranking/sectorwise_budgetdaywise_performance_with_text_ranked_full.xlsx
Description of columns:
date - Date of Budget
year - Year of Budget
budget_full_text_filename - Name of file having full budget transcript
sector - Identified sector
text_segment - Text excerpts related to the identified sector
number_of_companies - Number of companies in the identified sector for which we could get data
mean_target_increment - Denotes the change in performance of sector on the day next to the budget day (TARGET)
rank - Rank of the Sector in the given year (TARGET)

@misc{ghosh2025basirbudgetassistedsectoralimpact,
      title={BASIR: Budget-Assisted Sectoral Impact Ranking -- A Dataset for Sector Identification and Performance Prediction Using Language Models}, 
      author={Sohom Ghosh and Sudip Kumar Naskar},
      year={2025},
      eprint={2504.13189},
      archivePrefix={arXiv},
      primaryClass={cs.CL},
      url={https://arxiv.org/abs/2504.13189}, 
}

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