Challenges Ahead As Sitharaman, Team Working On FY26 Budget

New Delhi: Finance Minister Nirmala Sitharaman, set to make history with her eighth consecutive Union Budget, has worked tirelessly with key officials, including Finance Secretary Tuhin Kanta Pandey, to prepare a budget of over Rs50 lakh crore for FY26. The Budget will have to address several challenges, including decelerating economic growth, falling value of Rupee against the US dollar and moderation in consumption demand.

The economic growth is estimated to slow to a 4-year low of 6.4 per cent in FY25. This is the lowest growth since the outbreak of the COVID pandemic which hit the world in 2019. Sitharaman, who had steered the Indian economy through many difficult phases, including once-in-a-century pandemic, is again confronted with economic deceleration, moderation in consumption, stagnant private investment, and an uncertain geopolitical situation. On account of various factors, the rupee plunged to an all-time low of 86.7 per US dollar earlier this month.

The team, assisting the Finance Minister to frame Budget proposals for 2025-26, includes Revenue Secretary Pandey, Economic Affairs Secretary Ajay Seth, Expenditure Secretary Manoj Govil, Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla, Financial Services Secretary M Nagaraju, and Chief Economic Advisor V Anantha Nageswaran. The uphill task before the Finance Minister and her team would be to bolster growth without sacrificing fiscal prudence.

The government is also expected to stick to the fiscal glide path of reducing the fiscal deficit to below 4.5 per cent of Gross Domestic Product (GDP) in FY26 amidst various headwinds. Finance Secretary and Revenue Secretary Tuhin Kanta Pandey: The oldest hand at the finance ministry who has been involved with the Budget making process since October 2019 when he joined DIPAM as Secretary. In September last year, Pandey, a 1987-batch IAS officer from Odisha cadre, was appointed the Finance Secretary.

The Finance Ministry has six departments -- Revenue, Economic Affairs, Expenditure, Financial Services, DIPAM and DPE -- and the senior most bureaucrat in the ministry is designated as the Finance Secretary.