Union Budget 2026 27: Finance ministry sets the ball rolling

Amid 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 Ministry of Finance will begin pre-budget discussions with external stakeholders, including economists, agriculture, trade and industry experts, as well as trade unions and social sector experts, from mid-November. A meeting will also be held with state finance ministers later.

Promoting growth and building domestic dependence will remain the primary focus of the Union Budget, with fears that disruption in international trade will also extend into the next financial year.

“Though growth remains on track and is expected to reach 6.8% this fiscal according to the Reserve Bank of India, there are concerns about what will happen in FY27 with the increase in US tariffs,” official sources noted, adding that there are expectations that the bilateral trade agreement will take care of at least some of these concerns.

Domestic demand remained mixed, despite tax cuts on goods and services, and concerns remain about how this will be implemented in FY27.

The Center also remains keen on building local capabilities for manufacturing as well as for emerging sectors such as global capacity centres, and this will also remain the focus of the budget exercise. Another priority is to improve the ease of doing business by taking further measures to simplify procedures.

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

The Union Budget for FY27 should also take into account the 16th Finance Commission report on transfer of taxes between the Center and states. The report is likely to be submitted by the end of November.

The Ministry of Finance had issued a budget circular at the end of August to obtain forecasts for the revised 2025-2026 estimates and 2026-2027 budget estimates from ministries and administrative departments.

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