New Delhi [India], 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.
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