Finance ministry to commence preparations for Union Budget 2025-26 next month

Come September and the finance ministry will once again initiate preparations for the Union Budget 2025-26.
Significantly, this will be the third such exercise that officials will undertake this calendar year. With the General Elections earlier this year, the finance ministry has already worked on the Interim Budget and Vote on Account for 2024-25 in February as well as the full Budget for the fiscal in July.

The Budget division of the Department of Economic Affairs in the Ministry of Finance is expected to release the Budget circular on September 1 seeking Revised Estimates for 2024-25 as well as Budget Estimates for 2025-26 from all nodal ministries. This circular lays down the groundwork for the annual Budget making process, which ends with the presentation of the Union Budget on February 1 of the next year.

Pre-Budget meetings will then commence from the middle of October with the departments of expenditure and economic affairs with nodal ministries to finalise their demands for grants. The consultations are likely to be completed sometime in November and the demands would be finalised by early December.

This is a significant part of the Budget making exercise as it helps the government assess the quantum of funds required in the next fiscal as well as savings, if any, in expenditure in the current fiscal. It also provides clarity on the projected income and revenue to the government.

This time around there are expectations that there could be significant savings in expenditure by government ministries as the Budget was passed in August and there may be sufficient time for spending the entire Budgeted amount. As per the CGA data, the Centre’s total expenditure between April and June 2024 was Rs 9.69 lakh crore or 20.4% of the Budgeted spending of Rs 47.65 lakh crore for the current fiscal year.