BUDGET
Pegs FY27 transfer to states at INR 26.21 tln, up 12.2% on year
This story was originally published at 16:33 IST on 1 February 2026
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NEW DELHI – The Budget on Sunday projected transfers to states and Union Territories in the next financial year starting April at INR 26.21 trillion, up 12.2% from the revised estimate of INR 23.36 trillion for FY26. The Budget for FY26 had projected the transfer to states at INR 25.60 trillion.
The Budget for FY27, presented by Finance Minister Nirmala Sitharaman in Parliament, projected devolution of taxes to states at INR 15.26 trillion, up 9.6% from the revised estimate of INR 13.93 trillion in FY26.
The next financial year is the first year under the 16th Finance Commission's recommendations, which recommended that the government transfer 41% of taxes to states as their share, the same as the 15th Finance Commission's recommendation.
The Budget projected the transfer of Finance Commission grants to states at INR 1.23 trillion, down 15.4% from the revised estimate for FY26.
The following table details the transfer of resources to states and Union Territories with legislature as per the Budget proposals (in INR billion):
FY27 Budget Estimate | FY26 Revised Estimate | FY26 Budget Estimate | Y-O-Y % change (BE v/s RE) | |
Devolution of taxes | 15,262.55 | 13,929.71 | 14,224.44 | 9.6% |
Finance Commission grants | 1,293.97 | 1,529.53 | 1,327.67 | (-)15.4% |
Other transfers | 9,651.17 | 7,902.20 | 10,045.53 | 22.1% |
Total transfer | 26,207.69 | 23,361.44 | 25,597.64 | 12.2 |
End
Reported by Priyasmita Dutta and Gunjan Rajput
Edited by Saji George Titus
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