New Delhi: How India prepares the Union Budget: Inside the official process ahead of 2026 reveal
India’s finance minister Nirmala Sitharaman will to present the Union Budget for 2026-27 in Parliament on February 1, marking her ninth consecutive budget, at a time when India’s economy is expected to grow at 7.6 per cent in the current financial year despite persistent geopolitical headwinds.
The preparation of India’s budget is a months-long, highly confidential exercise involving multiple ministries, senior bureaucrats, and ministers, culminating in the presentation of the Annual Financial Statement in Parliament.
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Consultations first: The process formally begins several months before Budget Day, when the finance ministry initiates consultations with key stakeholders, including central ministries, state governments, industry bodies, economists, and representatives from agriculture, MSMEs, and social sectors.
Ministries’ inputs: Each Union ministry then submits detailed estimates of requirements and projections to the departments of expenditure and revenue under the finance Ministry, a standard process followed annually.
These demands are scrutinised by the finance ministry, which weighs competing priorities such as infrastructure spending, welfare schemes, defence, and subsidies, while keeping macroeconomic indicators like GDP growth, inflation, and fiscal deficit in view, news agency PTI reported.
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Parallel to expenditure planning, the Department of Revenue prepares taxation proposals, including changes to income tax, corporate tax, customs duties, and GST-related measures, based on revenue needs and economic conditions.
Series of meetings: The finance minister chairs a series of internal meetings with senior officials, including the finance secretary, revenue secretary, economic Affairs Secretary, and the Chief Economic Adviser, to align with the government’s broader agenda, the PTI report said.
As part of the constitutional process, the Budget is framed in accordance with Article 112 of the Constitution, which mandates the presentation of the Annual Financial Statement to Parliament.
Assessment before budget: The Economic Survey, prepared by the department of economic affairs under the supervision of the Chief Economic Adviser, is finalised separately and tabled a day before the Budget to provide an assessment of the economy.
Halwa ceremony: The final phase of preparation is marked by the traditional ‘halwa ceremony’, which Nirmala Sitharaman participated in on Tuesday, signalling the completion of budget drafting for 2026-27, the report added. The ceremony was held in the basement of North Block on Raisina Hill, as the new ministry offices at Kartavya Bhawan-1 do not house a printing press. The halwa ceremony is a customary ritual in which a traditional Indian dessert is prepared and served to Finance Ministry officials and staff involved in Budget preparation.
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