NEW DELHI: Finance Minister Nirmala Sitharaman on Wednesday rejected allegations levelled by several Opposition-ruled states that the Centre was not transferring states’ share from the divisible pool of taxes.
The Union finance minister, in her reply to the Budget discussion in the Lok Sabha, said that the Centre has transferred the full 41% share of divisible taxes to the states as mandated by the Finance Commission.
“The states should check if the entire net proceeds, which form the divisible pool, i.e., removing cess and surcharge from gross tax revenue, are received by them. There is no need to discuss the gross tax revenue,” the minister said.
The finance minister said the Centre has allocated `25.44 lakh crore to states in FY27. “This much money will go to the states. This entails an increase of `2.70 lakh crore from FY26,” Sitharaman said.
Commenting on the transfer of cess and surcharges, she clarified that these are collected for a purpose and if states can come up with proposals on health, education and roadways, they will get the funds. “Cess and surcharge collected by the Centre are given to the states for development work in various sectors. This is separate from the 41% of funds allocated to the states.”
Debunking allegations that the government was not approving credits to the states, the finance minister stated the total credit has grown 13.8% in the current financial year.
She pointed out that headline capital expenditure stands at `12.2 lakh crore while the effective capital expenditure, including grants to states, totals `17.1 lakh crore, amounting to 4.4% of the GDP.
The FM said the government has envisaged a total expenditure of `53.47 lakh crore for the next financial year, up 7.7% from the current fiscal ending March 31. According to the revised estimate, the budget size for FY26 is `49.64 lakh crore.
HARD TALK
Lighting into LoP Rahul Gandhi, the FM said it was the UPA govt that “sold” the interests of farmers to the WTO
The FM also raised the 2009 Sharm el-Sheikh jt statement that diluted India’s position on sovereignty and security while dealing with Pakistan
Dismissing concerns over AI and data expressed by Rahul, the FM said the govt is incentivising setting up of cloud and data centres in India
On concerns expressed by Oppn over food security, the FM said `2.27 lakh cr has been allocated for food subsidy