Union Finance Minister Nirmala Sitharaman on Monday led a significant pre-budget consultation session with finance ministers from various states and union territories. The meeting, held in New Delhi, aimed to gather inputs and suggestions for shaping the upcoming Union Budget for the financial year 2025-26.
Key Discussions and State Proposals
The consultation served as a platform for states to present their regional priorities and fiscal concerns. A major point of discussion was the need for enhanced capital expenditure to boost infrastructure development across the nation. States emphasized the importance of continued central support for building roads, railways, and urban infrastructure projects.
Several states raised the issue of timely disbursement of funds for centrally sponsored schemes. They urged the Union Finance Ministry to ensure smoother fund flow to accelerate project implementation at the ground level. The management of state finances and strategies for boosting revenue collection were also deliberated upon.
Participants highlighted the necessity of focusing on growth-oriented sectors that can generate employment and stimulate the economy. Suggestions from the states are expected to be considered by the Finance Ministry as it begins the complex process of budget formulation.
Strengthening Fiscal Federalism
This pre-budget meeting underscores the central government's approach of collaborative federalism. By consulting states before finalizing the national budget, the Centre aims to create a fiscal plan that addresses diverse regional needs while maintaining macroeconomic stability.
Finance Minister Sitharaman acknowledged the contributions and suggestions from the states. She reiterated the government's commitment to fostering a cooperative federal structure where the Centre and states work as a team for the country's economic development. The meeting was attended by senior officials from the Finance Ministry, including Finance Secretary T.V. Somanathan, alongside the state representatives.
Road to the Union Budget 2025-26
The pre-budget consultation with states is a critical step in the budget-making calendar. The Union Budget for 2025-26 is likely to be presented in Parliament by Finance Minister Nirmala Sitharaman in February 2025. This will be the first full-fledged budget of the new government following the 2024 general elections.
Economists and policymakers will be closely watching how the inputs from this meeting translate into budgetary allocations. The focus is expected to remain on sustaining India's growth momentum, ensuring fiscal prudence, and addressing key welfare and infrastructure gaps. The outcome of these discussions will play a vital role in shaping India's economic policy for the coming financial year.
