GOVERNMENT ACCEPTS 16TH FINANCE COMMISSION’S RECOMMENDATION TO RETAIN VERTICAL SHARE OF DEVOLUTION AT 41 PERCENT

₹1.4 lakh cr.  to BE GIVEN TO States as Finance Commission Grants for FY 2026-27

The Government has accepted the recommendation of the 16^th Finance Commission to retain the vertical share of devolution at 41 percent.

Presenting the Union Budget 2026-27 in Parliament today, Union Minister of Finance & Corporate Affairs, Smt. Nirmala Sitharaman said, “The Government has accepted the recommendation of the Commission to retain the vertical share of devolution at 41 percent. As recommended by the Commission, I have provided ₹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.”

She further said that the Commission submitted its report to the President on 17^th November 2025 and the Government is to lay the report along with the explanatory memorandum on the action taken report on the recommendations of the Commission in Parliament as mandated under Article 281 of the Constitution.

Vertical share of devolution retained at 41% and Rs.1.4 lakh crore allocated to states for FY 2026-27. The Government accepted the 16th Finance Commission's recommendation to retain the vertical share of devolution at 41 percent and has allocated Rs.1.4 lakh crore to States for FY 2026-27 as Finance Commission Grants, including Rural and Urban Local Body and Disaster Management Grants; the Commission's report was submitted to the President and will be laid in Parliament with an explanatory memorandum and action taken statement under Article 281.