FM Sitharaman to Brief RBI on Budget FY26 on Feb 8
On 8th February, finance minister Nirmala Sitharaman is slated to present Union Budget 2025-26 to RBI Central Board as major highlights where measures would include main relief items relating to income taxes so as to create an improved environment of increasing demand.
The post-budget meeting comes a day after the RBI announces the outcome of its Monetary Policy Committee meeting, amid rising expectations of possible rate cuts in support of moderating GDP growth. It's a routine that the finance minister briefs the RBI board about the budgetary announcements, mainly those affecting the fiscal and monetary policies.
On Budget Day, February 1, Sitharaman said the government would continue to be fiscally prudent even as it promoted economic growth. She reaffirmed the target of bringing down the fiscal deficit to 4.4% of GDP in FY26 from the estimated 4.8% in the current financial year. The government also aims to reduce the debt-to-GDP ratio to around 50% by March 2031 from the current 57.1%.
The Budget 2025-26 estimates total receipts, excluding borrowings, at Rs 34.96 lakh crore and total expenditure at Rs 50.65 lakh crore. It is expected to reach net tax receipts of Rs 28.37 lakh crore. These figures depict the government's strategy of revenue generation while sustained public spending takes place.
One of the most important announcements in the Budget was the income tax relief for middle-class taxpayers. Under the new tax regime, individuals with an annual income of up to Rs 12.75 lakh will not be required to pay any taxes, which will benefit nearly 1 crore taxpayers. The revised tax structure introduces new slabs, and people earning up to Rs 12 lakh annually are fully exempt from taxes due to a standard deduction of Rs 75,000.
The finance minister is expected to discuss the broader fiscal strategy with RBI officials, including measures to enhance liquidity, manage inflation, and stimulate economic growth. The central bank’s monetary policy stance will also be crucial in complementing fiscal efforts to drive economic recovery and stability.
Sitharaman will be accompanied by Minister of State for Finance Pankaj Chaudhary, Finance Secretary, Economic Affairs Secretary, Expenditure Secretary, Financial Services Secretary, and other senior officials from the finance ministry.
Against this backdrop of economic growth and fiscal discipline on the part of the government, the discussion to be held between the finance ministry and the RBI board is expected to set the tone for coordinated policy actions in the coming financial year.
