Current Affairs - Finance - Discussion

The current share of central tax revenues allocated to states is 41%. However, the Union government is considering reducing this share to at least 40% from the fiscal year 2026-27, aiming to address rising expenditure needs at the Centre. This proposal will be presented to the Finance Commission of India, and if approved, it could increase the Centre's revenue by approximately ₹350 billion. This move is part of the Centre's broader fiscal strategy amidst growing spending demands.