New Delhi [India], February 11 (ANI): Union Finance Minister Nirmala Sitharaman on Wednesday assured the Lok Sabha that 41 per cent of the divisible pool of taxes is being devolved to States, stating that no State’s share has been reduced.
“We have transferred 41 per cent of the divisible pool to the States. No State’s share has been reduced,” Sitharaman said while replying to the debate on the Union Budget 2026–27.
She added that States’ share of tax devolution in the coming financial year is estimated at Rs 25.44 lakh crore, marking an increase of Rs 2.7 lakh crore over the previous year.
Citing the 16th Finance Commission, the Finance Minister said the panel had analysed fund devolution between 2018 and 2023 and concluded that the Centre’s transfers to States during each of those years exactly matched the Commission’s recommendations.
Capital Expenditure Push and Support to States
On the recommendation of State Finance Ministers, Sitharaman announced that 50-year interest-free capital expenditure loans under the Special Assistance to States for Capital Investment scheme have been enhanced to Rs 2 lakh crore.
She said that while the Centre’s own capital expenditure stands at Rs 12.2 lakh crore in FY27, the effective capital expenditure, including States and Union Territories, rises to Rs 17.1 lakh crore, which is 4.4 per cent of GDP.
“This effective capex will give a strong push to the goal of Viksit Bharat,” Sitharaman said.
Infrastructure, Skilling, and Industrial Growth
The Finance Minister highlighted the Centre’s expanded infrastructure focus, which includes roads, national highways, and inland waterways to reduce logistics costs, especially for land-locked States.
She reiterated the Centre’s willingness to collaborate with States on Mega Textile Parks, particularly in industrial and ‘new-age’ textiles used in manufacturing sectors such as automobiles.
“We welcome any State that wants to enter this area. The Centre is willing to collaborate,” she said.
Sitharaman also emphasised the integration of skilling into education, announcing plans for mega entrepreneurship and education hubs near industrial clusters, enabling students to emerge as job creators rather than job seekers.
Credit Growth and Employment Initiatives
Addressing concerns over credit availability, Sitharaman said there was no shortage of lending to industry, including MSMEs.
“Total credit expanded by 13.8 per cent in the current financial year. As of January 15, 2026, non-food bank credit grew by 13 per cent, while NBFC credit rose by 15.4 per cent,” she said.
On employment generation, the Finance Minister announced the development of five Regional Medical Hubs to promote medical tourism, expected to create one lakh jobs over five years.
She also said that five large Textile-to-Leather Parks would be established and that a comprehensive senior-citizen care ecosystem is being developed, under which 1.5 lakh caregivers will be trained this year.
Direct Tax Collections Show Strong Growth
Meanwhile, India’s net direct tax collections for FY26 rose by 9.40 per cent to Rs 19.43 lakh crore as of February 10, 2026, according to data released by the Income Tax Department.
Gross direct tax collections stood at Rs 22.78 lakh crore, up 4.09 per cent year-on-year, while refunds declined by 18.82 per cent to Rs 3.34 lakh crore.
Net corporate tax collections rose to Rs 8.89 lakh crore, while non-corporate taxes increased to Rs 10.03 lakh crore. Securities Transaction Tax (STT) collections remained broadly stable at Rs 50,279 crore.
Sitharaman is expected to reply to the Budget debate in the Rajya Sabha on Thursday. (ANI)
574 words, 3 minutes read time.
About The Author
