New Delhi, Feb 1: The Union government has approved the recommendations of the 16th Finance Commission and announced a grant of Rs 1.4 lac crore to states for the financial year 2026–27, reaffirming its continued fiscal support to state governments.
Presenting the Union Budget, finance minister Nirmala Sitharaman said the Centre has formally accepted the Finance Commission’s proposals and will transfer a total of Rs 1.4 lac crore to states during the next financial year.
The 16th Finance Commission had recently submitted its comprehensive report to the President. The Centre examined the suggestions and recommendations in detail and has now given its official approval, paving the way for enhanced financial assistance to states.
The Centre has indicated that the grant should primarily be utilised in two key areas. In rural regions, the funds are to be directed towards improving roads, drinking water supply, sanitation and strengthening local panchayats. In urban areas, the allocation is intended for upgrading infrastructure, implementing smart city projects and improving public transport systems.
The substantial allocation is expected to strengthen cooperative federalism and support balanced development across states.
