India's 'Black Budget' of 1973: A Deep Dive into Economic Crisis
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News18•31-01-2026, 10:00
India's 'Black Budget' of 1973: A Deep Dive into Economic Crisis
- •The 1973-74 Union Budget, presented by Finance Minister Yashwantrao B. Chavan, is known as India's "Black Budget" due to a record fiscal deficit of Rs 550 crore.
- •Key factors contributing to the crisis included the 1971 war with Pakistan, the creation of Bangladesh, and the resulting surge in defence spending and refugee resettlement costs.
- •A severe drought in 1972 devastated agricultural output, leading to food shortages, rural distress, power cuts, and unemployment, forcing the government to allocate Rs 220 crore for relief.
- •The 1973 global oil shock dramatically increased import bills, fueled inflation, strained foreign exchange reserves, and worsened the balance of payments.
- •The budget allocated Rs 56 crore for nationalizing coal mining and general insurance, and Rs 160 crore for importing two million tonnes of food grains, reflecting the dire economic situation.
Why It Matters: The 1973 'Black Budget' highlighted India's severe economic strain from war, drought, and global oil shocks.
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