3 months ago
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Finance Minister Nirmala Sitharaman connected Wednesday (February 11, 2026) dismissed allegations by Opposition members that the Centre was not transferring 41% of the divisible excavation of taxes to the States, arsenic mandated by the 15th Finance Commission, asserting that the required transfers were made each year.
The 15th Finance Commission had recommended that for the play 2020-26, the Centre should transportation 41% of its divisible excavation of taxes to the States, which the Centre had accepted.
“Often, we are accused of not transferring the 41% that the 15th Finance Commission has recommended,” Ms. Sitharaman said successful the Lok Sabha, during her reply to the statement connected Union Budget 2026. “I guarantee you, it is 41% that we person transferred to the States. We person not reduced immoderate State’s devolvable tax.”
Growth successful transfers
The Minister said that the full resources to beryllium transferred to the States, including the devolution and nether centrally sponsored schemes, is estimated astatine ₹25.44 lakh crore for 2026-27.
“This entails an summation of ₹2.7 lakh crore implicit 2025-26 and is ₹3.78 lakh crore much than the actuals of 2024-25,” she said.
“The 16th Finance Commission analysed the States’ stock transferred by the Centre to the States from 2018-19 to 2022-23 and concluded that successful each of these years, the devolution made by the Centre precisely matches the proposal of the 15th Finance Commission,” Ms. Sitharaman added.
Devolution pool
She said that it is the Comptroller and Auditor General (CAG) that audits the Centre’s finances and decides what the nett proceeds of the Centre are, aft subtracting from the gross taxation receipts the cesses and surcharges collected by the Centre.
“Out of that, person we transferred 41% of the divisible pool, that is what should beryllium looked at, not the gross taxation revenue,” Ms. Sitharaman said. “The Constitution gives the Centre the authorization to cod cesses and surcharges.”
She further sought to antagonistic charges levelled by Opposition members that the Centre was shrinking the divisible excavation of taxes by focusing much connected cesses and surcharges, which the States cannot summation from.
“The cesses and surcharges are collected for a peculiar intent specified arsenic wellness cess, acquisition cess, roadworthy cess,” Ms. Sitharaman said. “These bash not payment the Centre, they spell to the States successful presumption of gathering schools, hospitals, roads successful the States.”
Medium-term Budget
The Finance Minister explained wherefore the Union Budget 2026 included respective announcements that were aimed astatine the mean and agelong term.
“This Budget has been prepared arsenic the archetypal Budget successful the 2nd 4th of the 21st century,” she said. “So, this Budget covers a batch of issues from 2026 to 2050. We are besides starting the caller five-year rhythm of the caller Finance Commission and truthful the estimates are mostly connected the recommendations of the 16th Finance Commission,” she said.
“By doing these [longer word announcements], which are starring america towards the mean and agelong term, we are besides continuing our propulsion successful gathering infrastructure,” she said. “It is not conscionable roads and nationalist highways, we are besides looking astatine waterways truthful that the outgo of logistics tin travel down and States that are successful the hinterland volition person the vantage of moving goods faster astatine a lesser cost.”
