FY26 Budget-making process to start in second week of October
Sep 18, 2024
Synopsis
The finance ministry has announced that pre-Budget meetings for the 2025-26 Budget will begin in the second week of October and run through mid-November. These meetings will address fund requirements, receipts, non-tax revenues, and net expenditure estimates. The process aims to finalize Budget Estimates and revised estimates for the ongoing financial year.
Pre-Budget meetings will start in the second week of October and run through the middle of November, the finance ministry said, as it announced the Budget circular for 2025-26.
The budget-making process formally starts every year with such meetings with various ministries and departments. These will be chaired by expenditure secretary Manoj Govil.
“The Budget Estimates (BE) for 2025-26 will be provisionally finalised after the completion of pre-budget meetings,” the department of economic affairs (DEA) said in a circular dated September 17.
The pre-budget meetings will dwell on four important issues--the requirement of funds across all expenditure categories, along with receipts of ministries and departments; the receipts of commercial undertakings run by various departments, which are netted against gross expenditure; non-tax revenues, including arrears; and net expenditure estimates.
The DEA also asked various departments to be realistic in their expenditure projections, in sync with a December 2022 circular.
The meetings also serve to help the finance ministry firm up revised estimates for the ongoing financial year.
After these meetings with ministries and departments, finance minister Nirmala Sitharaman will likely engage with various stakeholders, including industry captains, economists and various sectoral experts.
The next Budget will indicate whether the government intends to keep its promises of containing the fiscal deficit ratios at 5.1% of GDP and below 4.5% in 2024-25 and 2025-26, respectively.
The next budget also assumes significance as it marks the final year of the 15th Finance Commission (FC) cycle. So, any expenditure liability from schemes that are co-terminus with the current FC will have to be cleared for running into the 16th FC cycle.
“Please be advised that as 2025‐26 is the last year of the 15th Finance Commission (FC) cycle, ministries/departments may ensure that allocations sought in BE 2025‐26 are in line with duration of schemes and available sanctioned space,” the circular said. “Unless otherwise sanctioned, transfer of liabilities from 15th FC cycle to next 16th FC Cycle, of co‐terminus schemes is discouraged,” it added.
[The Economic Times]
