Union Finance Minister informed that funds devolved to States in 45 months under 15th FC exceed total funds devolved during 60 months under 14th FC (2015-2020)

Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman chaired the pre-budget consultations with Finance Ministers of States and Union Territories (with Legislature) at Jaisalmer, Rajasthan.

The meeting was attended by Union Minister of State for Finance Chri Pankaj Chaudhary, Chief Ministers of Goa, Haryana, Jammu and Kashmir, Meghalaya and Odisha; Deputy Chief Ministers of Arunachal Pradesh, Bihar, Madhya Pradesh, Rajasthan and Telangana; Finance Ministers, Ministers, Secretaries of Departments of Economic Affairs and Expenditure, Ministry of Finance and Senior Officers from the States/Union Territories and the Union Government.

The participants gave several valuable suggestions to the Union Finance Minister for consideration in the Union Budget for F.Y. 2025-26.

Smt. Sitharaman remarked that because of healthy macroeconomic environment, buoyancy and efficiency in the tax collections, the funds devolved to the States in the last 45 months (April 2021 to December 2024) under the 15^th Finance Commission is more than what was devolved in 60 months under the 14^th Finance Commission (2015-20).

The Union Finance Minister also referred to the Scheme for Special Assistance to States for Capital Investment (SASCI), which was first announced in the Union Budget 2020-21, and acknowledged that it has received a very good response from the States. The States have been requesting the Central Government to enhance the outlay under the Scheme as it is leading to construction of crucial capital assets in the States.

Smt. Sitharaman stated that the Centre has allocated an additional amount of approximately Rs. 30,000 crore as ‘Untied Funds’ under the SASCI-2024-25. This allocation may be used by the State Governments in any sector to further increase expenditure on creation of capital assets.

In addition to this, the Union Finance Minister stated that the Centre has created an additional dispensation under SASCI for the States affected by disaster of a severe nature as assessed by the Inter-Ministerial Central Team (IMCT), deputed by the Ministry of Home Affairs (MHA). This will aid the States in their efforts for reconstruction of the damaged infrastructure, like roads and bridges, water supply lines, electricity poles, and culverts etc. The States which suffered a natural disaster of severe nature (as assessed by IMCT) in FY 2024-25 may be eligible for upto 50% of their allocation under Part-1 (Untied) of the SASCI scheme. This amount will be in addition to the funds provided under the National Disaster Response and Mitigation Fund (NDRMF), Smt. Sitharaman added.

Smt. Sitharaman thanked the dignitaries for their valuable inputs and ideas which will be given due consideration in the preparation of budget for the ensuing Financial Year.

State fund devolution under the 15th Finance Commission increases transfers and expands untied capital support for States. Devolution of central funds under the 15th Finance Commission has exceeded prior-transfer levels, increasing States' fiscal capacity. The 2024-25 SASCI allocation adds untied capital funds for State use across sectors and creates a disaster dispensation allowing eligible States, as assessed by an Inter Ministerial Central Team, to receive up to fifty percent of their Part 1 (Untied) SASCI allocation for reconstruction of infrastructure, in addition to resources under the National Disaster Response and Mitigation Fund.