Finance Minister Nirmala Sitharaman on Wednesday, Feb. 11 told the Lok Sabha that a total of Rs 25.44 lakh crore will be transferred to states in 2026-27, including their share of taxes and allocations under centrally sponsored schemes. FM Sitharaman asserted that the Centre has adhered to the Finance Commission's recommendation on tax devolution.
Addressing the Parliament during her reply to the Budget discussion, FM Sitharaman said, "The total resources to be transferred to the states, including the devolution of states' share in taxes and releases that are made under the centrally sponsored scheme in 26-27, the coming year, is estimated to be at Rs 25.44 lakh crore. This much money will go to the states this year, next year. This entails an increase of 2.70 lakh crore.''
ALSO READ: Govt May Fall Short Of FY26 Direct Tax Target By Rs 1.5-2 Lakh Crore
The 16th Finance Commission analysed the State's share transferred by the Centre to the states from 2018-19 to 2022-23, and concluded that in each of these years, the devolution made by the Centre exactly matches the recommendation of the Finance Commission. ''So, we are not the only ones claiming this,'' said FM Sitharaman.
The Finance Commission itself, after studying this in detail, has stated in its report that the money which has to go from the Centre to the States, taking the years 2018-19 to 2022-23 as examples and examining them, has clearly said that whatever amount has to go from the Central Government to the State Governments has been given. ''There is no scope for any doubt in this for the States, '' she added.
FM Sitharaman also clarified that the cess and surcharge collected by the Centre are given to the States for development work in various sectors. This is separate from the 41% of funds allocated to the states. The Union Budget for FY 2026-27 has pegged total expenditure at Rs 53.47 lakh crore, FM Sitharaman added while replying to the discussion on the Budget, outlining the government's strategy of maintaining high capital spending alongside fiscal consolidation.
ALSO READ: Income Tax Rules Revised: Perk Limits Raised, Crypto Reporting Toughened
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
