Finance Minister Nirmala Sitharaman revealed in the Lok Sabha that the Budget for 2026-27 includes a total transfer of resources to states amounting to Rs 25.44 lakh crore. This marks a significant increase of Rs 2.7 lakh crore compared to the previous year. She dismissed claims by the Opposition that state resource transfers had decreased, emphasizing that allocations to states had actually risen.
Sitharaman highlighted that 41% of tax proceeds are being transferred to states in line with Constitutional guidelines. She also noted that the figures are audited by the CAG, ensuring transparency and accountability in the process. Additionally, she mentioned that cess collections, not part of net taxes, are also directed to states, covering areas like health, education, and infrastructure.
The Finance Minister outlined a total capital investment of Rs 17.15 lakh crore in the 2026-27 Budget, with a substantial multiplier effect expected to drive economic growth. She underscored that the Centre’s capital expenditure had increased to Rs 12.22 lakh crore, equivalent to 3.1% of GDP, showcasing an 11.5% rise from the previous year.
Incorporating transfers to states under various Centrally sponsored schemes, the total capex of Rs 17.15 lakh crore translates to 4.4% of GDP. Sitharaman debunked assertions by the opposition regarding a reduced fiscal deficit in the Budget, emphasizing that developmental spending had not been curtailed. She invited all states to engage with the Centre for support in initiatives like establishing food parks, IT hubs, smart cities, and waterways.
