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Ministry

Ministry of Finance

The Ministry of Finance is the Government of India's apex economic department: the institution that writes the Union Budget and, through it, sets how the Union taxes, spends and borrows. Working through six departments, it owns fiscal policy, direct and indirect taxation, public expenditure, the financial sector and the disinvestment of state assets. Where the Reserve Bank of India sets the price of money, North Block decides the size and shape of the state's balance sheet — which makes it, after the Cabinet itself, the most consequential economic seat of power in the country.

Updated

Headquarters
North Block, New Delhi
Departments
6 (Economic Affairs, Expenditure, Revenue, Financial Services, DIPAM, Public Enterprises)
FY2026-27 fiscal-deficit target
4.3% of GDP
FY2026-27 total expenditure
~Rs 53.5 lakh crore
Coverage since 194722 recorded events ·100% from official & primary sources
1945–1949: 1 event1950–1954: 1 event19501960197019801990–1994: 1 event19902000–2004: 1 event20002010–2014: 3 events20102015–2019: 7 events2020–2024: 5 events20202025–2026: 3 events

Role

The Ministry of Finance is the department that converts economic strategy into the state’s balance sheet. Each year it drafts the Union Budget — the Annual Financial Statement that Article 112 of the Constitution requires the government to lay before Parliament — and with it sets how much the Union government spends, how it taxes, and how much it borrows to cover the gap. Its reach runs from the income-tax slab an individual pays to the interest rate the government offers on its bonds, and it is the Union’s principal interlocutor with the states over shared taxes and Finance Commission transfers.

The work is divided across six departments, each under its own Secretary: Economic Affairs (macro policy, markets and the Budget itself), Expenditure (spending and public financial management), Revenue (direct and indirect taxes, through the CBDT and CBIC), Financial Services (banks, insurance and pensions), Investment and Public Asset Management or DIPAM (disinvestment), and Public Enterprises (oversight of central public-sector undertakings, moved into the Ministry from Heavy Industries). The Ministry works alongside — but is distinct from — the Reserve Bank of India, which owns monetary policy: fiscal policy sets the size of the deficit, monetary policy sets the price of money, and the two are the twin levers of macroeconomic management.

Desk maintained by IndiaStand editorial cycles. Officeholders are transient; this dossier tracks the institution.

Timeline since 1947

  1. reference

    First Union Budget of independent India

    India's first Finance Minister presented the new republic's first budget, carrying forward the fiscal machinery inherited from the colonial state.

    source 1

  2. reference

    Constitutional basis of the Budget

    Article 112 of the Constitution requires the government to lay an Annual Financial Statement before Parliament each year — the constitutional core of the Union Budget the Ministry prepares.

    source 1

  3. reference

    Liberalisation reforms

    A balance-of-payments crisis drove the Ministry's landmark liberalisation of trade, industry and finance, dismantling much of the licence-permit regime.

    source 1

  4. reference

    FRBM Act enacted

    The Fiscal Responsibility and Budget Management Act institutionalised fiscal discipline, requiring the government to publish medium-term fiscal targets and reduce the deficit over time.

    source 1

  5. reference

    Direct Taxes Code Bill introduced, then lapses

    The Ministry introduced the Direct Taxes Code Bill in the Lok Sabha to replace the Income-tax Act, 1961 and the Wealth Tax Act; it never passed and lapsed, leaving the 1961 Act in force until the rewritten Income-tax Act of 2025.

    source 1

  6. reference

    PFRDA Act gives the pension regulator statutory footing

    Parliament passed the Pension Fund Regulatory and Development Authority Act on 19 September 2013 (notified 1 February 2014), converting an interim body under the Ministry into a statutory regulator for the National Pension System.

    source 1

  7. reference

    Pradhan Mantri Jan Dhan Yojana launched by the Department of Financial Services

    The Ministry's Department of Financial Services launched a zero-balance mass banking programme on 28 August 2014, opening about 15 million accounts on day one; by August 2023 deposits under the scheme stood at roughly Rs 2.03 lakh crore.

    source 1source 2

  8. reference

    Black Money Act creates a separate regime for undisclosed foreign assets

    The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act received assent on 26 May 2015 and came into effect on 1 April 2016, taxing undisclosed foreign assets outside the Income-tax Act with penalties of up to three times the tax computed.

    source 1

  9. reference

    Insolvency and Bankruptcy Code commences

    The IBC was passed by the Lok Sabha on 5 May and the Rajya Sabha on 11 May 2016 and commenced on 28 May 2016, setting a 180-day corporate insolvency resolution window (330 days including extensions and litigation) and creating the Insolvency and Bankruptcy Board of India, on which the Ministry sits.

    source 1source 2

  10. reference

    Finance Act 2016 puts inflation targeting and the MPC into statute

    Amendments to the RBI Act carried by the Finance Act, 2016 came into force on 27 June 2016, creating a six-member Monetary Policy Committee with three central-government nominees and a statutory 4% inflation target with a 2-6% tolerance band — separating the Ministry's fiscal remit from a rule-bound monetary one.

    source 1

  11. reference

    101st Constitutional Amendment creates the GST Council

    Assented on 8 September 2016 after ratification by all states, the amendment inserted the constitutional basis for a dual GST and for the GST Council, making indirect-tax rates a Union-state joint decision rather than a Ministry one; the tax itself commenced 1 July 2017.

    source 1

  12. reference

    Budget advanced to 1 February and the Railway Budget folded in

    From 2017 the Union Budget moved from the last working day of February to 1 February, so that appropriations pass before the financial year starts; the separate Railway Budget, presented since 1924, was merged into it.

    source 1

  13. reference

    Goods and Services Tax introduced

    GST unified a fragmented indirect-tax system into a single nationwide regime, administered jointly by the Union and the states through the GST Council.

    source 1

  14. reference

    Corporate tax rates cut by ordinance

    The Taxation Laws (Amendment) Ordinance of 20 September 2019 — later enacted after the Lok Sabha passed the replacing Bill on 2 December 2019 — offered domestic companies an optional 22% rate (25.17% with surcharge and cess) and new manufacturers incorporated after 30 September 2019 a 15% rate (17.16% all-in).

    source 1

  15. reference

    Public-sector bank amalgamation: ten banks become four

    The consolidation announced on 30 August 2019 took effect on 1 April 2020, merging ten public-sector banks into four anchors; Oriental Bank of Commerce and United Bank of India were amalgamated into Punjab National Bank, creating an entity with about Rs 17.95 lakh crore in assets and 11,437 branches.

    source 1

  16. reference

    Atmanirbhar Bharat package announced; Ministry details the tranches

    A COVID-era package headlined at about Rs 20 lakh crore was announced on 12 May 2020 and detailed tranche by tranche by the Ministry, with follow-on packages in October and November 2020 taking the announced total to roughly Rs 29.87 lakh crore.

    source 1

  17. reference

    Fifteenth Finance Commission report for 2021-26 tabled

    Tabled with the Budget on 1 February 2021, the report fixed states' share of central taxes at 41% for 2021-26 (against 42% under the Fourteenth Commission), recommended Rs 2.9 lakh crore in revenue-deficit grants to 17 states, and set a glide path taking the central fiscal deficit to 4% of GDP by 2025-26.

    source 1source 2

  18. reference

    Retrospective taxation of indirect transfers repealed

    The Taxation Laws (Amendment) Bill, passed by the Lok Sabha on 6 August and the Rajya Sabha on 9 August 2021, nullified the 2012 retrospective basis for taxing offshore share transfers deriving value from Indian assets, refunding principal without interest to claimants who withdrew appeals and arbitration.

    source 1

  19. reference

    LIC initial public offering — the largest Indian IPO to date

    The government sold a 3.5% stake in Life Insurance Corporation in an offering open 4-9 May 2022, raising about Rs 21,000 crore at a valuation near Rs 6 lakh crore — far below the Rs 65,000-70,000 crore originally sought, and the anchor of that year's disinvestment programme.

    source 1

  20. official

    GST 2.0 rate rationalisation takes effect

    On the GST Council's recommendation the indirect-tax structure was collapsed largely into two slabs of 5% and 18%, with the 12% and 28% slabs removed and a 40% rate reserved for luxury and sin goods.

    source 1

  21. reference

    Union Budget 2026-27 presented

    The Budget set the FY2026-27 fiscal deficit at 4.3% of GDP with total spending of about Rs 53.5 lakh crore and capital expenditure of Rs 12.2 lakh crore, on a stated path of keeping central debt declining as a share of GDP.

    source 1

  22. reference

    Income-tax Act, 2025 comes into force

    A rewritten direct-tax code replaced the Income-tax Act, 1961, consolidating six decades of amendments into a shorter statute and replacing the 'previous year/assessment year' framework with a single 'tax year'.

    source 1

Frequently asked

What is Ministry of Finance?
The Ministry of Finance is the Government of India's apex economic department: the institution that writes the Union Budget and, through it, sets how the Union taxes, spends and borrows. Working through six departments, it owns fiscal policy, direct and indirect taxation, public expenditure, the financial sector and the disinvestment of state assets. Where the Reserve Bank of India sets the price of money, North Block decides the size and shape of the state's balance sheet — which makes it, after the Cabinet itself, the most consequential economic seat of power in the country.
When was Ministry of Finance established?
Ministry of Finance was established 1947.
What does Ministry of Finance do?
Its remit covers The Union Budget and overall fiscal policy, Direct and indirect taxation (income tax, customs, GST), Public expenditure, borrowing and the public debt, Financial-sector policy, public-sector banks and insurance, Disinvestment and management of public assets (DIPAM).
What is the latest on Ministry of Finance?
As of 2026-07-06: Income-tax Act, 2025 comes into force. A rewritten direct-tax code replaced the Income-tax Act, 1961, consolidating six decades of amendments into a shorter statute and replacing the 'previous year/assessment year' framework with a single 'tax year'.

Official sources

The government's own pages for this institution — go straight to the primary.

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