Countdown to Feb 1 begins

FY26 Budget will come only six months after the last one, but has all the signs of becoming a hallmark document

- ASIT RANJAN MISHRA

On November 11, the finance ministry concluded the pre-Budget meetings with the financial advisors of different departments and ministries on the revised estimates for 2024-25 (FY25) and Budget estimates for FY26.

Though the formal engagement of Finance Minister Nirmala Sitharaman with various stakeholders seeking their Budget wishlists is expected to begin next month, the Budget-making exercise is gaining momentum in North Block, the seat of the finance ministry in New Delhi.

It will be the second Budget of the Modi 3.0 government and eighth straight Budget for Sitharaman, rare in Indian polity.

Though the FY26 Budget will come only six months after the FY25 final Budget, which was presented in July after Modi's return to power for a third consecutive term, it has all the signs of becoming a hallmark Budget.

New path

It is expected to chart a new path towards debt targeting for the country focusing on debt from FY27 onwards, departing from the current practice of targeting the fiscal deficit.

Sitharaman had announced a comprehensive review of the Income Tax Act and customs duty rate structure by January 2026.

Progress on both is expected to be announced in the next Budget.

"The fiscal consolidation path announced by me in 2021 has served our economy very well, and we aim to reach a deficit below 4.5 per cent next year (2025-26).

The government is committed to staying the course.

From 2026-27 onwards, our endeavour will be to keep the fiscal deficit each year such that the Central government debt will be on a declining path as percentage of GDP," Sitharaman had said in her July Budget speech.

GDP is short for gross domestic product, which is the monetary value of all goods and services produced in a country during a specified period.