Pre-budget consultations underway: Farmers, economists, industry shape Budget 2026-27

The government has started pre-Budget consultations for the 2026-27 Union Budget, engaging economists, agriculturists, industry representatives, and social sector stakeholders. These discussions form part of the Finance Ministry’s structured process to gather inputs and guide allocations, policy priorities, and fiscal planning ahead of the February Budget presentation.

The agriculture sector was a central focus. Farmers and agriculturists highlighted concerns over income stability, Minimum Support Price (MSP) support, affordable inputs, credit access, and risk management. They also pressed for expanded procurement beyond traditional staples, improved storage and cold-chain infrastructure, enhanced irrigation and watershed projects, and stronger support for farmer producer organisations (FPOs) and value-added food processing. Compared with last year, there is greater emphasis on climate-resilient agriculture, digital monitoring tools, and integrating FPOs into larger value chains, reflecting lessons from the previous budgets where subsidies and MSP payments dominated.

Economists at the consultations emphasized employment generation, inflation management, rural demand revival, and sustaining overall growth. Compared with prior years, there is now a stronger focus on job creation in manufacturing and services, skill development, technology adoption, and productivity improvements, signaling a shift from short-term stimulus toward long-term structural reforms.

Industry representatives from the Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI), and PHD Chamber of Commerce and Industry (PHDCCI) submitted pre-Budget recommendations calling for direct tax reforms, simplified compliance, incentives for manufacturing and innovation, and support for start-ups and exports. Compared with last year, sectors such as green energy, electronics manufacturing, semiconductors, logistics, and agro-processing are expected to receive more attention, reflecting government priorities for sustainable and technology-driven growth.

Fiscal discipline remains a key concern. Last year, the government faced a fiscal deficit of 5.9% of Gross Domestic Product (GDP), higher than the previous year’s 5.2%, due to increased capital expenditure, higher subsidies, and stimulus measures. Analysts say the key areas for improvement include better targeting of subsidies, improved tax compliance, leveraging public-private partnerships, and focused capital investments that generate long-term growth. This year, the fiscal deficit is projected around 5.6% of GDP, with the government expected to prioritise capital-intensive and targeted spending rather than broad subsidy increases.

Looking at trends over the past four years provides context:

• 2022-23 Budget:

• Focused on post-pandemic recovery, with large allocations for infrastructure, healthcare, rural employment schemes, and stimulus measures to revive the economy after COVID-19 disruptions. The fiscal deficit was higher as a result of these emergency and recovery measures.

• 2023-24 Budget:

• Began shifting toward fiscal consolidation while maintaining support for infrastructure and social schemes; incremental reforms to taxation and public investment were introduced.

• 2024-25 Budget:

• Continued recovery focus with rural support schemes like Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) and Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), major capital expenditure, and limited structural reforms; fiscal deficit remained a concern.

• 2025-26 Budget:

• Emphasis on fiscal consolidation, increased capital spending, incremental MSP increases, support for green energy, digital infrastructure, and emerging sectors; the fiscal deficit was around 5.9% of GDP.

• 2026-27 Budget (expected):

• Expected to focus on targeted capital allocations for climate-resilient agriculture, storage and logistics, FPO and agro-processing support, employment creation, industrial competitiveness, and fiscal prudence.

The inputs from these consultations will feed into the detailed Budget drafts over the coming weeks. The Union Budget 2026-27 is scheduled to be presented in Parliament on February 1, 2026, and stakeholders across the economy will be watching closely to see how lessons from previous budgets are applied, whether allocations reflect sectoral needs, and whether new initiatives address emerging challenges.