Budget 2022: James Wilson, man who presented India’s first budget

In 1859, when the British Crown was
still recovering from the mutiny of the 1857 revolt, it appointed a Scottish
businessman to find a solution to India’s financial crisis.

Wilson was the founder of The Economist
Newspaper and was well known in England for his knowledge of economic theory
and policy, including the practical knowledge of commercial affairs. Karl Marx
had described Wilson as ‘an economic mandarin of high standing’ in his
‘Capital’.

Also Read | Budget 2022: Key financial terms you should know

Wilson presented the first-ever budget
in India in 1860. He introduced a financial budget based upon the English
model. Although Wilson was criticized for not considering the Indian
conditions, he set the foundations of how many economic institutions in India
would go on to function.

Also Read | Budget 2022: Infra sector expects investment push for NPE, Make-in-India

Wilson was born in 1805 in Hawick, a
small border town in Scotland, to a Quaker family. He became an apprentice at a
hat factory at the age of 16. His father was a wool manufacturer and went on to
buy a factory for Wilson and his brother. During the 1837 economic crisis,
Wilson lost most of his wealth and sold his assets to avoid bankruptcy. In
1853, he founded the Chartered Bank of India, Australia, and China, which later
became the Standard Chartered Bank in 1969.

Also Read | Budget 2022 likely to rein in inflationary expectations

Wilson first came to India on November
28, 1859, and he was appointed finance member in Viceroy Lord Canning’s
council. The British government ruling India then was facing a huge financial
crisis. To resolve the issue Wilson introduced major institutional changes and
decided to ensure the influence of economic principles in the financial
management of India. He made several proposals such as taxing the trading
classes, a government-approved paper currency, reforming the financial
structure with budgets, estimates, and auditing. He demanded the creation of
civil police and a department for public works and roads. Wilson also set up a
military finance commission and a civil finance commission.

Also Read | Budget 2022: Health sector seeks investment push

Wilson presented his budget on February
18, 1860, in which he introduced three types of taxes – income tax, licence
tax, and tobacco duty. However, Charles Canning was ordered to drop the licence
tax and tobacco duty. The income tax act was criticised by zamindars and led to
a huge controversy. In terms of ideology, Wilson was a liberal and strong
proponent of the policy of laissez faire. He was also seen as someone with a
deep knowledge of how the market worked.

Also Read | Budget 2022: Online gaming industry seeks regulatory clarity and lower tax rates

Wilson died
in 1860, after having contracted dysentery in the scorching heat of Calcutta.
He was discreetly buried at the Scottish cemetery in Mullick Bazaar in
Calcutta.