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Informist, Friday, Aug. 29, 2025

 

--Fin min to hold pre-FY27 Budget meetings from Oct 9 till mid-Nov 

 

NEW DELHI – The finance ministry has issued the circular to kick-start the process of formulating the Budget for the next financial year starting Apr. 1. Top finance ministry officials will hold meetings with other secretaries and financial advisers from Oct. 9 to mid-November. At these meetings, officials will finalise provisional estimates for Budget 2026-27 (Apr-Mar).

 

The government typically presents the Budget on Feb. 1. However since Feb. 1, 2026 is a Sunday, the government may take a call on presenting it a day later. 

 

The circular sets the timeline for departments and ministries to submit their revised estimates for the current financial year and the Budget estimates for the next. The requirement of funds for all categories of expenditures along with receipts of ministries and departments will be discussed during the meetings, the circular said.

 

After the meetings, the finance ministry will share the provisional expenditure estimates with the respective ministries and departments. "Final expenditure ceilings will be decided by the Ministry of Finance taking into account the expenditure priorities and receipt projections of the Government," the circular said. These figures would be reflected latest by end December or early-January, it added. Expenditure Secretary Vumlunmang Vualnam will spearhead the Budget-making process.

 

In FY26, the government aims to lower its fiscal deficit to 4.4% of GDP, as per its fiscal consolidation roadmap. Broadly, the tenets of the Budget are likely to be the same, but it will be a crucial budget in terms of two metrics – the global growth slowdown from geopolitical and trade uncertainties and likely domestic revenue shortfall from the announced income-tax changes and proposed changes to the goods and services tax structure. 

 

Additionally, the 16th Finance Commission will also submit its report in October determining the formula for states' share of central taxes and the grants-in-aid for five years starting FY27, which may have ramification on the Centre's coffers. The commission visited all states and Union territories by June, and a majority of them, including Bharatiya Janata Party-led state governments, have reportedly sought a 50% share in central taxes, which – if approved – will eat into central revenues.

 

The 15th Finance Commission had recommended 41% of the divisible pool be devolved to states. The share of states was 1 percentage point lower than the ratio mandated by the 14th Finance Commission to adjust for the reorganisation of Jammu and Kashmir and Ladakh into Union territories. According to the Budget for FY26, the Centre is projected to transfer INR 14.22 trillion to states as their share in taxes, out of the INR 42.70 trillion total tax that the government has projected to collect this fiscal.   End

 

Reported by Priyasmita Dutta

Edited by Tanima Banerjee

 

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