Twin themes to anchor FY27 Budget as govt fast-tracks reforms

The official added that FY27 will also see a broader push for sector-wide reforms to boost productivity-an objective outlined in the Economic Survey 2024-25

• FY27 budget to focus on deregulation and decriminalisation for growth
• Amendments to Companies Act and IBC planned to boost ease of doing business
• New GDP base year to revise key macro ratios like debt-to-GDP and tax-to-GDP

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With the Union Budget for FY27 approaching, the government is preparing to fast-track a new phase of structural reforms aimed at injecting fresh momentum into medium-term economic growth.

Senior officials said the twin themes shaping finance minister Nirmala Sitharaman's ninth budget will be deregulation and decriminalisation, with clear directions issued across ministries and departments to prioritise these areas. The objective is to position the budget as a roadmap for sustained and faster economic expansion, Mint reported.

All ministries have been asked to submit proposals to simplify or eliminate outdated laws, rules and procedures, one official said, adding that these inputs are being reviewed and refined at the highest levels of government roughly every 10 days.

Another official said the government intends to introduce amendments to two major legislations during the budget session of Parliament. Proposed changes to the Companies Act, 2013 are expected to enhance ease of doing business, while amendments to the Insolvency and Bankruptcy Code (IBC) are aimed at making debt resolution quicker and more effective.

The official added that FY27 will also see a broader push for sector-wide reforms to boost productivity-an objective outlined in the Economic Survey 2024-25. The survey had stressed that India needs to grow at around 8% in real terms for a decade or two to achieve developed-nation status by 2047, with greater economic freedom for individuals and small businesses identified as a key medium-term priority.

D.K. Srivastava, chief policy advisor at EY India, said obsolete regulations could either be scrapped or reworked, noting that such steps would improve administrative and economic efficiency, with gains becoming more evident over the medium term.

The finance ministry did not respond to queries seeking comment for the story.

Another notable aspect of the FY27 budget will be changes in key macroeconomic ratios following the rollout of a new GDP series. The statistics ministry is set to introduce GDP estimates with a revised base year of 2022-23 on February 7. While the budget's absolute figures will remain unchanged, ratios such as debt-to-GDP and tax-to-GDP are expected to be recalculated once the updated GDP data is available, one official said.

Budget documents for FY26 indicate that the Centre aims to reduce the debt-to-GDP ratio to 50% by FY31 from 56.1% in FY26, implying an average annual consolidation of about 1.22 percentage points between FY27 and FY31.

Industry bodies have also been pressing for reforms in the power sector, including ending cross-subsidisation where industrial users bear higher tariffs, and enabling greater private participation in power distribution.

Earlier this week, Prime Minister Narendra Modi discussed FY27 budget priorities with Sitharaman, Niti Aayog vice-chairman Suman Bery, chief economic advisor V. Anantha Nageswaran and other senior officials. Modi underscored the need for mission-mode reforms to build global capabilities and deepen India's integration with international markets, while keeping policymaking aligned with the country's long-term vision for 2047, Mint reported.