Nanabhoy "Nani" Ardeshir Palkhivala (1920 – 2002)

The eminent liberal, lawyer, and economist Nani Palkhivala (1920-2002) was known for his analysis of and speech on the annual budget. Here we post excerpts of his speech on the 1970-71 Union Budget, later published in a monograph by the Forum of Free Enterprise. The entire speech can be found here. 

Ancient India made a signal contribution to the growth of human civilization–it gave a new direction to philosophy and gave imperishable expression to “thoughts that wander through eternity “. Emerson regarded the Upanishads as the feast of reason and the flow of soul par excellence. Modern India has made three contributions to civilization–the Bandh, the Gherao, and the pre-Budget technique. The first is political oppression, the second is industrial oppression, and the third is well calculated to condition the public mind for fiscal oppression.

The pre-Budget technique consists in making it widely known throughout the month of February that such levels of taxation would be inflicted on the people as to make them hate the very sight of money and hardly leave a shirt on their backs, so that when actually the Budget is introduced with 93.5 per cent income tax and 12 per cent wealth tax as the maximum marginal rates, the Budget evokes a favourable, and in fact a cheerful response.

The Union Budget for 1970-71 has been called an “imaginative” Budget. It is only so in the sense that it imagines certain consequences to ensue from the Budget which are contrary to all known motivations of human nature and all rules of sound economics.

It was Justice Holmes who once remarked that most men judge things dramatically and not quantitatively. This explains the dramatically favourable general response to the Budget, without quantitative analysis of the burdens it imposes and the effects it can be expected to produce on the national economy. If one were to sum up the effect of the Budget in one sentence, one would say that it is politically clever and economically unsound.

After all, a Budget is not intended to be merely an exercise in political survival or an essay on political gimmicks. It is intended to equip the country to face the grim realities of the economic situation. A fair evaluation of the Budget can be made only against the background of the following calamitous realities:

  1.  Mounting figures of unemployment.
  2. The stagnancy of the per capita income.
  3. The tardy rise in the gross national product.
  4. The poor performance on the export front.
  5. The paucity of public and private savings.


The human attributes in citizens which are most precious to a nation are integrity, industry and Intellect — the three ‘I’s.’ The Budget makes a frontal attack on all these three priceless attributes. Our governmental policies are mainly responsible for the fact that among the youth of India some of the finest brains in medicine and science, technology and business management, have chosen to emigrate and settle in other countries where they can work without irritating official restrictions and interference, and can also keep a substantial part of the fruits of their own labour. With this year’s Budget, the exodus sf some of our best young brains is bound to increase.

You can read the original, unabridged speech here. Visit for more works by Indian Liberals dating back to the 19th Century. 

Post Disclaimer

The opinions expressed in this essay are those of the authors. They do not purport to reflect the opinions or views of CCS.