Assam CM Himanta Biswa Sarma expressed optimism on Sunday that the upcoming Union Budget for 2026–27 would allocate a higher share of tax revenue to the state compared to the previous fiscal year. Speaking to the press ahead of the budget presentation, Sarma emphasized the importance states place on revenue devolution announcements in the annual budget. “We look at how much revenue devolution is done in the budget. We see how much money was given to us last fiscal, and how much will be allocated this year. I am sure that we will get more funds this time compared to last year,” he said confidently, reflecting the state government’s hope for greater financial resources.
The Chief Minister highlighted that the nature of Union Budget allocations to states has evolved significantly over the years. Whereas earlier budgets often focused on individual projects—such as inaugurating a new train service like the Rajdhani Express—such project-specific announcements have become less prominent. “Earlier, Union budgets used to include one train or one project to the state. However, these have become very ordinary things nowadays,” Sarma remarked. He suggested that broader fiscal transfers and general revenue sharing now take precedence in states’ considerations, marking a shift toward a more systematic and predictable financial relationship between the Centre and the states.
On Sunday, Union Finance Minister Nirmala Sitharaman began her historic ninth consecutive budget presentation in the Lok Sabha at 11 am, setting a new record for the longest tenure delivering India’s annual financial plan. During the session, she also tabled the report of the 16th Finance Commission, which lays down the framework for tax revenue devolution between the Centre and the states for the period spanning 2026 to 2031. The Finance Commission, a constitutional body chaired by former NITI Aayog Vice-Chairman Arvind Panagariya, plays a crucial role in recommending the formula for sharing central taxes with states and advising on Centre-state financial relations to ensure balanced fiscal federalism.
The 16th Finance Commission’s report, presented alongside the Union Budget, is critical because it defines how tax revenues collected by the Centre will be shared with the states over the next five years. The commission’s recommendations impact states’ fiscal capacities and their ability to fund development and welfare schemes. It is important to note that cesses and surcharges imposed by the Centre are excluded from the divisible tax pool, meaning they do not get shared with states. This framework influences the annual allocations states receive in the Union Budget and shapes the financial dynamics between the Centre and states like Assam. The Chief Minister’s anticipation of increased revenue devolution reflects the broader expectations states have from the commission’s recommendations and the government’s fiscal policies.
