Budget 2026: Why PC Mahalanobis is called the 'Father of the Indian Budget'

The title “Father of the Indian Budget” is often attributed to different figures, depending on whether one looks at India’s colonial past, its early years of independence, or the intellectual foundations of modern economic planning. While Sir James Wilson introduced the budget system in India during British rule, many economists and scholars regard Professor Prasanta Chandra Mahalanobis as the father of the Indian Budget in its modern, data-driven sense. 

Key figures in Indian Budget 

India’s budgeting framework has evolved through the contributions of several key personalities, each shaping a distinct phase of its history. 

James Wilson, a British economist and founder of The Economist magazine, presented India’s first budget in 1860 as Finance Member of the Viceroy’s Council. Introduced on the English model, his budget aimed to stabilise colonial finances in the aftermath of the 1857 Revolt. Wilson’s reforms included the introduction of income tax, customs duty rationalisation, and systematic public accounting — laying the institutional foundation of budgeting in India. 

RK Shanmukham Chetty, independent India’s first Finance Minister, presented the first Union Budget of a sovereign India in November 1947. His budget focused on economic stability, revenue mobilisation, and managing the challenges of Partition, setting the financial tone for the newly formed nation. 

PC Mahalanobis, an eminent Indian scientist and statistician, played a transformative role in shaping India’s economic planning after Independence. Though he never presented a budget, his influence on how budgets were conceived and structured was profound. 

Legacy shared across eras 

In essence, India’s budgeting tradition rests on a shared legacy: 

• James Wilson introduced the budget system. 
• RK Shanmukham Chetty gave it national character after Independence. 
• PC Mahalanobis provided the intellectual and statistical backbone that transformed budgeting into a tool for planned economic development. 

Why PC Mahalanobis is called the 'Father of the Indian Budget' 

Mahalanobis is widely known as the Father of Indian Statistics, and his statistical innovations became central to India’s budgeting and planning process. He founded the Indian Statistical Institute (ISI) and helped establish the Central Statistical Organisation (CSO), strengthening India’s capacity for reliable data collection and analysis. 

His most significant contribution came through the Mahalanobis Model, which shaped the Second Five-Year Plan (1956-61). The model prioritised heavy industrialisation and capital goods production, arguing that long-term economic growth required strong industrial foundations. 

Crucially, Mahalanobis integrated rigorous statistical analysis into economic planning and budgeting. His work on large-scale sample surveys provided essential data for government policies, enabling evidence-based allocation of resources. Budgets during this period closely mirrored Five-Year Plan objectives, making statistics and planning inseparable from fiscal decision-making. 

It is this data-driven, scientific approach to budgeting — rather than the act of presenting the budget itself — that has earned Mahalanobis the title “Father of the Indian Budget” in academic and policy circles.