Budget 2019-20: Centre’s total transfers to states will go up by Rs 1.24 lakh crore

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Updated: February 6, 2019 3:50:59 PM

The total transfers by the Union government to states and union territories will increase to Rs 13.70 lakh crore in FY 2019-20.

narendra modi budget 2019Prime Minister Narendra Modi during Budget 2019 in Lok Sabha

The total transfers to states from the Centre will see a 10 per cent increase in the financial year beginning April 2019. The amount that will be transferred is almost half of the Union government’s budgeted expenditure.

According to the interim budget presented by finance minister Piyush Goyal, this year the Union government will transfer a total of Rs 13.70 lakh crore which is 10% more than the revised estimates of Rs 12.46 lakh crore for the current financial year. This amount is almost equal to half of the central government’s budgeted expenditure for FY 2019-20.

The Union government’s total transfers, including devolution to states as per their share in taxes, finance commission transfers and loan and grants, have registered a steady increase in the last three financial years. It has gone up by nearly 27% in the last last two financial years and is estimated to go up by another 10% in the next fiscal, registering a cumulative increase of nearly 40% in three financial years between 2016-17 to 2019-20.

According to the information given by finance minister Piyush Goyal in the interim budget, the central government transferred a total amount of Rs 9.86 lakh crore in 2016-17, Rs 10.85 lakh crore in 2017-18 and Rs 12.47 lakh crore in 2018-19 (revised estimates) to states and UTs. For FY 2019-20, finance minister Piyush Goyal has pegged total transfers to 29 states and 2 union territories with legislatures at Rs 13.7 lakh crore, an amount that is almost equal to half of the budgeted expenditure of the central government in the financial year.

The Union government’s total transfers to states and union territories will increase by 10% in FY20.

The share of state governments and union territories will form the biggest chunk of the total transfer by the Centre. It will be Rs 8.45 lakh crore or nearly 62% of this total amount of Rs 13.70 lakh crore which will be followed by scheme related and other transfers that will account for nearly 29% of Rs 3.94 lakh crore. And Rs 1.92 lakh crore or 10% of the total amount of Rs 13.70 lakh crore will be transferred as grants mandated by the finance commission.

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