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States Get 41% Tax Share, Rs 25.44 Lakh Crore in FY27: Sitharaman

Finance Minister Nirmala Sitharaman affirmed that a 41% share of central taxes is devolved to states, with the coming year's allocation estimated at Rs 25.44 lakh crore. She cited the 16th Finance Commission's analysis confirming the Centre's transfers matched its recommendations from 2018-2023. The government has also increased 50-year interest-free capital expenditure loans for states to Rs 2 lakh crore under a special assistance scheme. New initiatives like medical hubs and textile parks are planned to generate significant employment.

Key Points: 41% Tax Share for States, Rs 25.44 Lakh Crore: Sitharaman

  • 41% tax share devolved to states
  • States' share estimated at Rs 25.44 lakh crore
  • 50-year capex loans doubled to Rs 2 lakh crore
  • New textile parks and medical hubs to generate lakhs of jobs
  • Credit growth strong at 13.8%
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41% share of taxes devolved to States, estimated at Rs 25.44 lakh crore for coming year: Sitharaman in Lok Sabha

FM Sitharaman says states' tax share is 41%, estimated at Rs 25.44 lakh crore for next year, with increased capex loans and new job schemes.

"We have transferred 41% of the divisible pool to the states. No state's share has been reduced. - Nirmala Sitharaman"

New Delhi, February 11

Union Finance Minister Nirmala Sitharaman on Wednesday assured that a 41% share of taxes is devolved to the States, and said, "We have transferred 41% of the divisible pool to the states. No state's share has been reduced."

"In the coming year, the States' share is estimated at Rs 25.44 lakh crore, which is devolved to them, an increase of Rs 2.7 lakh crore from last year," she said while replying to the debate in the Lok Sabha on the Union Budget 2026-27.

She cited the 16th Finance Commission and said it had analysed the devolution of funds from 2018 to 2023 and concluded that the Centre's transfers to states during each of those years exactly matched the Commission's recommendations.

"The 16th Finance Commission analysed the state's share transferred by the Centre to the states from 2018 to 2023 and concluded that in each of these years, the devolution made by the Centre exactly matches the recommendation of the Finance Commission," Sitharaman said.

"On the recommendation of state Finance Ministers, capital expenditure loans for 50 years are increased to Rs 2 lakh crore for Special Assistance to States for Capital Investment. While the Centre's capex stands at Rs 12 lakh crore, in effect, with States and UTs, it rises to Rs 17.1 lakh crore," the Finance Minister said.

The Government of India had launched a Scheme Special Assistance to States for Capital Investment under which the financial assistance is provided to the States Governments in the form of 50-year interest free loan for capital investment projects

"We are willing to work with states for Mega textile Parks, particularly looking at industrial textiles, which are going to be 'new age', which are now becoming a part of manufacturing sector whether it's car cushions which is completely made of industrial textiles so these new age textiles requirements can also be fulfilled," she said.

"I welcome any state, which wants to enter this area. The Centre is willing to collaborate with them," she added.

She also highlighted the credit flow and said there is no shortage of lending to industry, including small and medium enterprises. "Total credit expanded by 13.8% in the current financial year. As of January 15, 2026, non-food bank credit grew 13%, while NBFC credit rose 15.4%," she said.

Speaking about new employment opportunities for the youth, the Finance Minister said that five Regional Medical Hubs will be developed to promote medical tourism, which alone is expected to generate one lakh jobs over the next five years.

She also announced that five large Textile-to-Leather Parks will be established, creating a significant number of new employment opportunities.

Additionally, a comprehensive care ecosystem for senior citizens is being developed, under which 1.5 lakh caregivers will be trained this year itself.

Lok Sabha took up discussion on the Union Budget yesterday. Sitharaman is expected to reply to the debate in the Rajya Sabha on Thursday.

- ANI

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Reader Comments

P
Priya S
Good to see the focus on job creation! The medical hubs and textile parks can be game-changers if implemented well. Training 1.5 lakh caregivers is also much needed for our ageing population. My only request is to ensure these opportunities reach Tier-2 and Tier-3 cities, not just metros. 🙏
A
Arjun K
The numbers sound impressive, but the real test is on-ground delivery. We often hear about fund transfers, but the pace of actual project completion is slow. Hope states utilise this capital expenditure effectively for roads, water, and power. The 50-year loan is a good move to reduce pressure on state finances.
S
Sarah B
As someone working in the SME sector, the credit growth figures (13.8%) are encouraging. Access to finance has been a major hurdle. If NBFC credit is rising at 15.4%, it shows liquidity is reaching smaller businesses. This, combined with the textile park push, could boost manufacturing exports.
V
Vikram M
Respectfully, while the devolution matches Finance Commission recommendations, some states with larger populations and development deficits might still feel the need for more. The principle is good, but the formula should be periodically reviewed to address regional imbalances. The focus on 'new age' textiles is visionary though.
K
Kavya N
Medical tourism hubs are a brilliant idea! India has the talent and can offer quality care at a fraction of the cost. Generating 1 lakh jobs is a solid target. Hope they also focus on training paramedical staff and creating world-class facilities. This can put us on the global map. 💪

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