Budget sets aside Rs 1.4 lakh crore for states as Finance Commission grants

The Union Budget for 2026-27 provides 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.

Presenting the Union Budget 2026-27 in Parliament on Sunday, Finance Minister Nirmala Sitharaman said: "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."

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