New Delhi, Jan 31 (UNI) Senior Congress leader Jairam Ramesh on Saturday drew attention to what he described as serious coordination gaps in economic policymaking ahead of the union Budget for 2026–27, warning that key fiscal numbers could require revision within weeks of being announced.
In a post on X, Ramesh said the upcoming Budget, scheduled to be presented on February 1, will be closely watched by state governments as it will announce the implementation of the recommendations of the 16th Finance Commission.
“State governments will be anxiously awaiting what awaits them since the Finance Minister will be announcing the implementation of the recommendations of the 16th Finance Commission,” Ramesh said.
He explained that the Finance Commission, constituted under Article 280 of the Constitution every five years or earlier, is mandated to recommend the share of states in the tax revenues collected by the Centre, the distribution of that share among individual states, and the provision of special grants for five years. The 16th Finance Commission covers the period from 2026–27 to 2030–31.
While underscoring the importance of the Finance Commission’s role in sustaining fiscal federalism, Ramesh flagged two additional concerns that he said could undermine the Budget’s credibility.
First, he pointed out that many Budget estimates are presented as a percentage of Gross Domestic Product (GDP), even as a new GDP series with 2022–23 as the base is scheduled for release on February 27, 2026, just 26 days after the Budget.
“Would the Budget numbers then undergo revisions very soon after they are unveiled on February 1, 2026?” Ramesh asked.
Second, Ramesh highlighted that a new Consumer Price Index (CPI) series with 2024 as the base is expected to be released on February 12, 2026. According to him, there is anticipation that the revised CPI will significantly reduce the weight of food prices, which could materially affect Budget calculations.
“If this were to be the case, there would be an impact on the Budget numbers,” he said.
He also noted that the Wholesale Price Index (WPI) is undergoing revision and is expected to be released in the coming months, adding another layer of uncertainty to key macroeconomic indicators.
“Either way, it reflects poorly on coordination in policy making,” Ramesh said.
The Budget for 2026–27 will set the fiscal tone for the first year of the 16th Finance Commission award period, even as economists and states assess the implications of impending revisions to core economic data.
