Union Budget 2026 to be Presented on Sunday February 1

Union Budget 2026 to be Presented on Sunday February 1

Why in News? 

The Union Budget for 2026–27 will be presented in the Lok Sabha on February 1, with the Economic Survey preceding it on January 29. This upcoming budget is expected to outline fresh priorities, strengthen growth pathways, and set a clear fiscal direction for the year ahead.

Expectations from the Union Budget 2026–27

• India’s Union Budget 2026–27 will be presented in the Lok Sabha on February 1, 2026 by Finance Minister Nirmala Sitharaman. This budget arrives at a time when the Indian economy shows high growth potential and inflation remains relatively controlled compared with global peers. 
• Experts expect the Union Budget 2026–27 to continue supporting strong economic growth as India maintains its role as a leading global growth engine. India’s economy is projected to expand at around 7.4 % real GDP growth for fiscal year 2025-26, according to government estimates. Some financial institutions like State Bank of India (SBI) suggest actual growth may exceed this projection. 
• Maintaining fiscal discipline is expected to be a priority in the Budget 2026–27. India’s fiscal deficit target for fiscal year 2025-26 remains 4.4 % of GDP, and analysts believe the government will aim to sustain or gradually lower this level. The budget is likely to emphasise measured spending and efficient revenue mobilisation.
• Industry groups and advisors have highlighted the need for tax certainty and rationalisation of complex tax structures. They suggest simplifying TDS (Tax Deducted at Source) provisions, reducing litigation risks, and extending advance ruling validity for customs to enhance compliance and predictability for businesses.
• Stimulating private sector investment is another major expectation from the budget. This may include reintroducing accelerated depreciation benefits for investors in manufacturing and technology sectors. Such incentives can boost capital formation and help industries adopt modern equipment and processes.
• The government may also expand production-linked incentive schemes (PLI) to emerging sectors like artificial intelligence, robotics, space technologies, and renewable energy. Targeted incentives can attract global capital and help make India a hub for advanced manufacturing and innovation.
• Amid demographic shifts and rapid technological change, the budget is expected to prioritise skill development schemes. Analysts suggest that new programmes could support youth training in emerging sectors like renewable energy, digital technology, and advanced manufacturing.

What is the Union Budget?

• About: The Union Budget is the Government of India’s annual financial statement that explains how public money will be raised and how it will be spent during a financial year. It presents expected revenue, proposed expenditure, and estimated fiscal balance for the year that begins on April 1 and ends on March 31. 

• • History: The first budget of independent India was presented in 1947, and the first full budget was delivered in 1948. Since 2017, the budget has been presented on February 1 every year.

• Constitutional Framework: The Constitution of India lays down a clear structure for preparing and passing the Union Budget. Article 112 mandates the presentation of the Annual Financial Statement which includes revenue and capital accounts of the government. The President must cause the AFS to be laid before both Houses of Parliament.

Budgetary Process in India

The process of preparing the Union Budget follows a structured sequence that involves many ministries, committees, and specialised agencies:

• The budget process begins around September each year. The Budget Division of the Department of Economic Affairs issues guidelines to all ministries and departments. These guidelines explain how proposals should be drafted and how estimates must be prepared for the coming year.
• Each ministry prepares revenue and expenditure estimates. They assess ongoing programmes, new schemes, staff requirements, and projected outcomes. Ministries also evaluate performance trends and prepare notes.
• The Department of Expenditure reviews proposals sent by ministries. Discussions are held to ensure financial discipline. The Ministry of Finance evaluates how each proposal fits within the larger fiscal goals such as maintaining the fiscal deficit target. NITI Aayog provides guidance on long term development priorities. 
• Special committees provide sector specific recommendations. 
  • GST Council recommends changes to indirect taxes. 
  • Financial Stability and Development Council monitors financial sector risks. 
  • Expenditure Finance Committee (EFC) reviews proposals for new schemes.

• Standing Committees of Parliament evaluate demands and assess departmental performance.

• The Chief Economic Adviser leads the preparation of the Economic Survey, which is presented one or two days before the budget. It analyses the performance of the previous year, highlights challenges, and offers policy suggestions.
• Once the estimates are finalised, the document is kept confidential. For many years, officials entered a secure printing facility called the budget press.
• After presentation, the budget goes through detailed examination in Parliament.

• General Discussion allows members to debate broad priorities.
• Departmental Standing Committees scrutinize demands for grants.
• Demand for Grants are voted upon in the Lok Sabha.
• The Appropriation Bill authorises withdrawals from the Consolidated Fund.
• The Finance Bill gives effect to tax proposals.

The Rajya Sabha may discuss but not amend demand for grants. The process must be completed before the start of the new financial year on April 1.

Important Facts Related to Union Budget

• The term ‘Budget’ comes from the French word bougette, meaning “small leather bag,” historically used by finance ministers to carry official financial documents
• The Finance Minister begins budget day with a brief meeting with senior officials at North Block. The Finance Secretary, Revenue Secretary, Expenditure Secretary, and Economic Affairs Secretary attend this meeting.
• The Ministry of Finance conducts the Hawla Ceremony before the budget printing process starts. Officials cook and distribute halwa in a large vessel. This ritual symbolises teamwork and marks the beginning of the final stage.
• The Finance Minister presents the budget in two major parts. The first part explains economic conditions. The second part explains tax proposals and financial statements. The speech usually lasts between 90 minutes and 120 minutes.
• Finance Ministers carried a leather briefcase from 1947 to 2020. This tradition came from the British practice of carrying a red dispatch box. But the Finance Minister started using a tablet device instead of the traditional briefcase in 2021.
• C.D. Deshmukh introduced the practice of printing Union Budget documents in Hindi in 1955, a historic move aimed at making the budget more accessible to the public. 
• India presented a separate railway budget for 92 years. The government merged it with the Union Budget in 2017. This merger helped align transport planning with national financial planning.
• Indira Gandhi became the first woman to present the Union Budget for the fiscal year 1970-71. 
• Nirmala Sitharaman created history by presenting the maximum nine consecutive budgets in Indian history. 
• Morarji Desai holds the record for presenting the Union Budget 10 times, the highest number by any Finance Minister in India’s history. 
• The 1973–74 Union Budget, presented by Finance Minister Yashwantrao B. Chavan, is famously known as India’s “Black Budget” due to an unprecedented fiscal deficit.