Union Budget 2026-27: Finance ministry sets the ball rolling

Amidst global headwinds and an uncertain external economic environment, the finance ministry is set to begin preparations for the Union Budget 2026-27 from next month, with boosting domestic growth as a key priority.

According to sources, the finance ministry will initiate pre-Budget discussions with external stakeholders, including economists, agricultural experts, trade and industry, as well as labour unions and social sector experts, from the middle of November. A meeting with state finance ministers will also be held subsequently.

Boosting growth and building domestic reliance will continue to be the primary focus of the Union Budget, with concerns that the turmoil in international trade will also spill over into the next fiscal.

“While growth remains on track and is expected at 6.8% this fiscal as per the Reserve Bank of India, there are worries as to what happens in FY27 with the US tariff hikes,” noted official sources, adding that there are expectations that the bilateral trade agreement will take care of at least some of these concerns.

Domestic demand has remained uneven, despite the goods and services tax cuts, and concerns remain about how it will play out in FY27.

The Centre also remains keen on building domestic capabilities for manufacturing as well as for sunrise sectors like Global Capability Centres and this too will remain a focus of the Budget exercise. Another priority will be improving the ease of doing business with more measures on the anvil for procedural simplification.

Over the past year, the government has announced major measures for both income tax and GST and expectations are that Budget 2026-27 may skip further big-ticket announcements on this front apart from procedural corrections and simplifications.

Union Budget FY27 will also have to take into consideration the report of the Sixteenth Finance Commission on devolution of taxes between the Centre and the states. The report is likely to be submitted by November end.  

The finance ministry had issued the Budget circular in August end seeking projections for Revised Estimates 2025-26 and Budget Estimates 2026-27 from administrative Ministries and Departments.

Pre‐budget meetings chaired by the Expenditure Secretary started from October 9 and are likely to continue until early November.  The Union Budget 2026-27 is expected to be presented in early February.