New Delhi

Union Finance Minister Nirmala Sitharaman on Wednesday said that the Centre continues to devolve 41 per cent of the divisible tax pool to states, asserting that no state’s share has been reduced.

Replying to the debate on the Union Budget 2026–27 in the Lok Sabha, Sitharaman said the estimated devolution to states in the coming financial year stands at Rs 25.44 lakh crore, marking an increase of Rs 2.7 lakh crore over the previous year.

“We have transferred 41 per cent of the divisible pool to the states. No state’s share has been reduced,” she said.

Citing the findings of the 16th Finance Commission, the Finance Minister said the Commission had reviewed the Centre’s transfers to states between 2018 and 2023 and found that the devolution in each of those years aligned with its recommendations.

“The 16th Finance Commission analysed the transfers made by the Centre from 2018 to 2023 and concluded that the devolution in every year matched its recommendations,” she said.

On capital expenditure support, Sitharaman said that, based on suggestions from state finance ministers, the allocation for 50-year interest-free loans under the Special Assistance to States for Capital Investment scheme has been raised to Rs 2 lakh crore.

While the Centre’s capital expenditure is pegged at Rs 12 lakh crore, she noted that the combined capital outlay of the Centre along with states and Union Territories would reach Rs 17.1 lakh crore.

Under the Special Assistance scheme, the Centre provides long-term, interest-free loans to states for capital investment projects.

The Finance Minister also invited states to collaborate with the Centre in establishing Mega Textile Parks, particularly in the area of industrial textiles.

“We are willing to work with states for Mega Textile Parks, especially in new-age industrial textiles that are increasingly integrated into manufacturing sectors such as automobiles. I welcome any state that wants to enter this area. The Centre is ready to collaborate,” she said.

Highlighting credit growth, Sitharaman said there was no shortage of lending to industry, including small and medium enterprises. Total credit expanded by 13.8 per cent in the current financial year, she said. As of January 15, 2026, non-food bank credit had grown by 13 per cent, while credit by non-banking financial companies rose by 15.4 per cent.

On employment generation, the Finance Minister announced that five Regional Medical Hubs would be developed to promote medical tourism, a move expected to generate approximately one lakh jobs over the next five years.

She also said that five large Textile-to-Leather Parks would be set up to create additional employment opportunities.

In addition, a comprehensive care ecosystem for senior citizens is being developed, under which 1.5 lakh caregivers are to be trained during the current year.

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The Lok Sabha began discussions on the Union Budget on Tuesday. Sitharaman is scheduled to reply to the debate in the Rajya Sabha on Thursday.