Budget 2027: Big news for everyone. Preparations for the 2027 Budget are underway. The Finance Ministry has instructed all central ministries and departments to create realistic projections for expenditures and revenues for the upcoming fiscal year. The government’s priority will be to manage public spending, assess existing schemes, and boost non-tax revenue.
As per the budget circular released by the Finance Ministry, pre-budget discussions will commence on October 12, 2026, and will run until mid-November. The Expenditure Secretary will lead these discussions. Ministries are required to submit pertinent budget data by October 6, while tax revenue estimates should be provided by October 15. Initially, ministries must account for ongoing or urgent expenditures before seeking funds for new initiatives or expenses.
In estimating expenditures, actual spending up to September 2026, expenditures from the same period last year, outstanding payments, and remaining balances must be considered.
Review of old plans
The government has specified that discontinued schemes should not be factored into the revised estimates. Additionally, no funds will be allocated in the 2027-28 Budget for schemes that will not extend beyond 2026-27. The government also aims to minimize the return of large unspent amounts at the end of the financial year. If a grant results in savings of Rs 100 crore or more, an explanation must be provided.
Focus on boosting non-tax income
The government has asked ministries to provide details on user charges, outstanding amounts, and other non-tax revenues. Fees for services may also be evaluated to ensure the government receives a fair return on its expenses. However, it remains uncertain what tax modifications will be introduced in the 2027 Budget, the extent of subsidy reductions, or the funding distribution for each scheme. These details will become clearer as the budget process unfolds.
Instructions given to ministries and departments
The Department of Economic Affairs, Ministry of Finance, has directed ministries and departments to present as accurate and realistic financial projections as possible when preparing budget estimates. The ministry also stated that efforts should be made to minimize the demand for additional resources during the fiscal year.
This will help maintain more effective and disciplined public financial management. The Budget Circular also clarifies that budgetary provisions should be proposed only for those schemes and programs that have the approval of the competent authority.
In addition, details of approved expenditure plans for ongoing schemes will also need to be provided. The government wants to ensure the use of budgetary resources in a more transparent, accountable, and results-oriented manner. All ministries and departments will prepare their detailed demands for grants through the Union Budget Information System (UBIS).