Budget 2026-27 Boosts State Transfers by Rs 2.7 Lakh Crore, Says FM

Speaking in the Lok Sabha, she refuted the Opposition charge that the Centre has reduced the transfer of resources to the states, pointing out that the allocation to states has gone up. All the money due to the states has been transferred to the states, and there is no scope for doubt on this issue, she remarked.

The Finance Minister said that the Centre was transferring 41 per cent of the net proceeds of taxes to the states in accordance with Constitutional norms. The figure is also audited by the CAG, she added,

She alsosaid that this cess amount, which is not included in the net taxes, also makes its way to the states. For instance, the cess collected under various heads such as health, education, and roads eventually gets transferred to the states.

The Finance Minister said that the Budget for 2026-27 provides for a total capital investment of Rs 17.15 lakh crore, which has a 4X multiplier force that will accelerate economic growth in the march for Viksit Bharat.

She pointed out that the Centre's capital expenditure was Rs 12.22 lakh crore, which amounted to 3.1 per cent of GDP, and represented an increase of 11.5 per cent compared to the corresponding figure for 2025-26.

After including the transfer to the states under various Centrally sponsored schemes, the capex of Rs 17.15 lakh crore works out to 4.4 per cent of GDP.

The Finance Minister said this disproved the opposition's claim that the fiscal deficit has been kept cut to 4.3 per cent in the Budget by reducing developmental expenditure.

She further stated that the Centre has opened its schemes to all states and did not intend to leave out any state. She welcomed the state governments to approach the Centre for aid in establishing mega food parks, IT parks, smart cities and waterways, etc.

"Any state can aspire -- by going through the PM Gati Shakti filters -- if they have a viable proposition. Any state can request the establishment of Allied and Health Services hubs, where we intend to set up medical centres. States can seek to be part of this initiative, under which all aspects of medical education and hospitals for patient treatment can be concentrated in one area. So any state can qualify," Sitharaman said.

This is a major, forward-looking proposition, given the medical tourism advantage that India possesses. It will become a centre for multi-purpose, multi-speciality Allied Health Services, through which we can further promote medical tourism, she added.

Similarly, all states can participate in the scheme for setting mega centres for clubbing education and skilling centres for youth.

"These mega centres will enable students to become entrepreneurs, and this kind of a mega centre can be kept next to any industrial cluster that any state has," she observed.

"So, these mega entrepreneurship building centres as education hubs can also come up in any state. We are willing to work with states so that this mammoth higher education centre can be propped up," Sitharaman added.

The Finance Minister pointed out that the emphasis in the budget is on labour-intensive sectors so that they can have more resources to improve, and it is also looking at the legacy industries, which are waiting for rejuvenation, and have been funded.

She pointed out that the emphasis of the budget on high-value agriculture and horticulture crops, such as coconut promotion, will benefit 1 crore farmers.

The Finance Minister further stated the agricultural sector was being accorded priority with digital support in the form of Agri stack, which will contain all details of soil and fertiliser to boost productivity and enhance the earnings of farmers. The stack will contain information on scientific agricultural practices such as the use of quality seeds and timely irrigation.

- IANS