Budget 2026: From ministries to PMO, who prepares India’s Union Budget?

The Union Budget 2026 is drawing closer. Markets, households and ministries are eyeing Finance Minister Nirmala Sitharaman's February 1 Speech at 11 AM. The budget will examine spending targets and programme priorities in an extremely uncertain economic environment. 

When the Union Budget is presented in Parliament each year, all eyes are on the Finance Minister. But behind that single speech lies months of intense planning, negotiations, calculations, and coordination involving hundreds of officials across the government.

So, who actually prepares the Union Budget?

At the centre of the exercise is the Ministry of Finance, led by the Finance Minister. Within the ministry, the key responsibility lies with the Department of Economic Affairs, particularly its Budget Division. This team acts as the nerve centre, coordinating inputs, crunching numbers, and drafting the final Budget documents.

The process begins nearly six months in advance. Every ministry submits its expenditure demands and funding needs. These requests often exceed available resources, triggering detailed discussions and tough negotiations. The Finance Ministry evaluates these demands against revenue estimates, fiscal deficit targets, and broader economic priorities.

Another crucial player is the Chief Economic Adviser (CEA) and the Economic Division, which provides macroeconomic analysis and growth projections. Their inputs help shape assumptions about GDP growth, inflation, tax collections, and borrowing capacity. 

The Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC) play a major role in proposing tax policy changes. Any revision in income tax slabs, exemptions, GST-related measures, or customs duties flows through these bodies.

The Prime Minister’s Office (PMO) and senior Cabinet members are also consulted on major policy decisions, ensuring the Budget aligns with the government’s political and economic agenda.

What is the "budget lock-in"?

As Budget day approaches, secrecy becomes paramount. Officials involved are placed under a temporary “budget lock-in”, cut off from the outside world to prevent leaks. This is a tradition dating back decades.

Importance of multiple stakeholders in the process

For Budget 2026-27, this entire machinery is working to balance growth ambitions, fiscal discipline, welfare needs, and global uncertainties.