Funds devolved to states under 15th Finance Commission higher: FM

Funds devolved to states under the 15th Finance Commission (2021-2024) is more than what was devolved under the 14th Finance Commission (2015-20), finance minister Nirmala Sitharaman said on Friday.

In a pre-budget meeting with states, Sitharaman remarked that because of healthy macroeconomic environment, buoyancy and efficiency in the tax collections, the devolution has increased.

"The funds devolved to the states in the last 45 months (April 2021 to December 2024) under the 15th Finance Commission is more than what was devolved in 60 months under the 14th Finance Commission (2015-20)," an official statement quoting Sitharaman said.

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 states.

States have been requesting the Central government to enhance the outlay under the scheme as it is leading to construction of crucial capital assets.

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 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.

Sitharaman said the states which suffered a natural disaster of severe nature (as assessed by IMCT) in FY25 may be eligible for up to 50 per cent 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), Sitharaman added.

Many states in the pre-budget meeting with Sitharaman demanded an increase in disaster relief funding in the upcoming budget for 2025-26.