'Itna Paisa States Ko Jayega': Nirmala Sitharaman Debunks States Deprived of Credit Claim

New Delhi: Union Finance Minister Nirmala Sitharaman said in Parliament on Wednesday that while states, mostly Opposition-ruled ones have often complained of not getting enough money or devolutions from the Centre, the central government has actually transferred the full 41% share of divisible taxes, as recommended by the Finance Commission.

“16th Finance Commission analysed the state's share transferred by the Centre to the states from 2018-19 to 2022-23, and concluded that in each of these years, the devolution made by the Centre exactly matches the recommendation of the Finance Commission. So, we are not the only ones claiming this,” she said while replying to the Budget debate in Parliament.

"The Finance Commission itself, after studying this in detail, has stated in its report that the money which has to go from the Centre to the states, taking the years 2018–19 to 2022–23 as examples and examining them, has clearly said that whatever amount has to go from the Central Government to the State Governments has been given. There is no scope for any doubt in this for the states," Sitharaman asserted.

Sitharaman said that the total resources to be transferred to the states, including the devolution of state's share in taxes and releases that are made under the centrally sponsored scheme in 2026-27 is estimated at Rs 25.44 lakh crores. “Itna paisa states ko jayega (this much money will be transferred to the states), this year,” she said, informing that this entails an increase of Rs 2.70 lakh crores than the previous year, and Rs 3.78 lakh crore more than the actuals of 2024-25.

Credit Flow to Industries

Refuting charges that the Centre has decreased credit flow to industries, Sitharaman said, “Total credit has actually expanded by 13.8% in the current financial year. As of January 15, 2026, non-food bank credit has grown by 13%, while NBFC credit rose 15.4% at the same period,” underlining the fact that “Credit ka kohin kami nahi hai (There is no shortage of credit flow).”

The Finance Minister also clarified that cess and surcharge collected by the Centre are given to the states for development work, and it is separate from the 41% of funds allocated to the states.

“Cesses and surcharges are collected for specific purposes like health cess, education cess, road cess. All these do not come to us, but for states...Whatever is collected through those, are all given to the states. It is collected by the Centre but the money goes to the states,” she said. 

‘Sab Zero Hai’

The Finance Minister also pointed out, contrary to the Opposition's standpoint, especially the TMC, that GST is imposed on essential items like milk and diapers, all such items listed out by the government are completely out of its ambit.  

"Since the time GST was introduced in 2017, milk was kept out of its ambit. This is a speech to make the House feel stupid. There's no GST on milk, education, from pre-school to higher secondary, all these are free from GST. GST is not even imposed on education, leading to recognized qualifications. Books, text-books, everything is exempt from GST. This is from July 2017. In the next generation 2025, further improvements were brought on," Sitharaman said.

"Pencil, sharpener, itna?...How can you go on saying like this," the Finance Minister said jokingly even pinching herself, as the Treasury benches erupted into laughter. 

“Pencil, sharpener, eraser, exercise books, notebooks, maps, sab zero hai,” Sitharaman clarified.

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