The forgotten finance minister: RK Shanmukham Chetty and India’s first budget

Subscribe to enjoy similar stories. R.K. Shanmukham Chetty is rarely counted among India’s most celebrated finance ministers.

Yet, he holds the singular distinction of presenting the first Union budget of independent India. His tenure, however, was short-lived—lasting just over a year—and ended abruptly. That wasn’t due to incompetence.

A sharp economic thinker, Chetty had already proven his acumen as the Diwan of Cochin (1935-41), initiating key reforms, including improvements to the Cochin port. His real misstep? He belonged to the wrong party. As one of only three non-Congress members in Nehru’s first cabinet, Chetty found himself ideologically out of sync with the socialist-leaning government.

His budget speech on 26 November 1947, was telling: "I hold the belief that for many years to come there is need and scope for private enterprise in industry. We cannot afford to lose the benefit of the long years of experience which private enterprise has gained in the building up of our industrial economy." Read this | How top bureaucrat GV Ramakrishna turned bullfighter to clean up India's stock market Yet, beyond ideology, Chetty’s speech remains invaluable for what it reveals about India’s economic condition at the moment of independence. The horrors of Partition often overshadow the financial turmoil that gripped the country in 1947.

Today, it is easy to criticize the government’s economic path—especially given how its socialist model eventually morphed into the stifling licence-permit raj that stunted growth for decades. But to understand why those choices were made, we must turn to Chetty’s budget speech. Presenting the 1947-48 budget, he laid out a stark assessment of Partition’s economic toll: “The budget of the