- By Raju Kumar
- Sun, 01 Feb 2026 03:30 PM (IST)
- Source:JND
Union Budget 2026: Finance Minister Nirmala Sitharaman, in her ninth consecutive budget presentation in the Parliament on Sunday, provided an allocation of Rs 1.4 lakh crore to the states as Finance Commission Grants based on a 41 per cent share of the devolution.
"The government has accepted the recommendation of the Commission to retain the vertical share of devolution at 41 per cent. As recommended by the Commission, I have provided Rs 1.4 lakh crore to the States for the FY 2026-27 as Finance Commission Grants. These include rural and urban local body and disaster management grants," Sitharaman said.
The Commission submitted its report to the President on November 17, 2025, and the government is to lay the report along with the explanatory memorandum on the action taken report on the recommendations of the Commission in Parliament as mandated under Article 281 of the Constitution.
'Fiscal Deficit Projected To 4.3 Per Cent Of GDP For 2026-27'
The Finance Minister has projected a further reduction in the fiscal deficit to 4.3 per cent of GDP for 2026-27 as the government continues on the path of fiscal consolidation. Sitharaman further elaborated that the government has maintained fiscal prudence and monetary stability whilst maintaining a strong thrust on public investments. She said that the government had fulfilled its commitment to reduce the fiscal deficit to 4.4 per cent in the Budget for 2025-26 and would now reduce it further to 4.3 per cent as it continues on the fiscal prudence path.
'Capital Expenditure Of Rs 12.2 Lakh Crore In The Budget'
She said that the target reflects a balance between supporting economic momentum and keeping public finances stable. Sitharaman also announced a capital expenditure of Rs 12.2 lakh crore in the Budget for 2026-27, to boost big-ticket infrastructure projects for growth and jobs in the economy.
The Finance Minister said that an Infrastructure Risk Development Fund would be set up to accelerate the development of big projects.
She said to push economic growth, the Budget proposes to deliver a powerful push to infrastructure, including highways, ports, railways, and power projects.
(With IANS inputs)