Budget 2026-27: FM Sitharaman allocates Rs 1.4 lakh crores to states

FM Nirmala Sitharaman presented the Union Budget 2026-27, allocating Rs 1.4 lakh crores for states and retaining the 41% devolution share. The budget also includes a new Coconut Promotion Scheme to boost production in major growing states.

Senior BJP leaders watched the Union Budget 2026-27 live at the BJP state office, Mararji Bhavan in Kerala. Among the spectators were National General Secretary Vinod Tawde, State President Rajeev Chandrasekhar, Thiruvananthapuram Mayor, councillors, and other party functionaries.

Union Budget: State Allocations and Devolution

Finance Minister Nirmala Sitharaman on Sunday presented the Union Budget 2026-27 in Lok Sabha, her ninth consecutive Union Budget. The Centre has allocated Rs 1.4 lakh crores for states for the Financial Year 2026-27 as Finance Commission grants, Union Finance Minister Nirmala Sitharaman said

FM Sitharaman said the Centre has accepted the 16th Finance Commission's recommendation to retain the vertical share of devolution at 41 per cent. She said, "The Government has accepted the 16th Finance Commission recommendations to retain the vertical share of devolution at 41 per cent. I have allocated Rs 1.4 lakh crores for states for FY 2026-27 as Finance Commission grants. These include rural and urban local body and disaster management grants."

15th Finance Commission Grants Context

The 15th Finance Commission recommended a share of states in the central taxes to be 41 per cent, and the 16th Finance Commission has retained the vertical share of devolution. In December 2025, for grants to rural bodies, the Centre released more than Rs 723 crores to Rajasthan and Jharkhand. This funding was allocated under the 15th Finance Commission to strengthen village-level institutions, according to a Ministry of Panchayati Raj press release. The government allocated these funds to support local groups in carrying out important work in the areas. In Rajasthan, a total of Rs 303.0419 crores was released as the first part of the money for the financial year 2025-26. This specific amount was meant for 24 district panchayats, 339 block panchayats, and 3,857 gram panchayats.

Coconut Promotion Scheme Proposed

Nirmala Sitharaman also proposed a Coconut Promotion Scheme aimed at increasing production and improving productivity to boost India's competitiveness in coconut cultivation. She said the scheme will focus on major coconut-growing states and include measures such as replacing non-productive trees with new, high-yielding saplings.

"To further enhance competitiveness in coconut production, I propose a coconut promotion scheme to increase production and enhance productivity through various interventions, including replacing non-productive trees with new saplings or plants of varieties in major coconut-growing states," Sitharaman said. (ANI)

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