Itanagar, Arunachal Pradesh Deputy Chief Minister Chauna Men on Monday said the Union Budget will strengthen fiscal federalism by maintaining vertical transfer of 41 per cent of central taxes to states, as recommended by the 15th and 16th Finance Commissions, ensuring stability and predictability in states’ finances.
41 pc central tax devolution ensures stability for Arunachal: DyCM”The continuation of vertical devolution of 41 per cent of central taxes reflects the Centre’s commitment to fiscal federalism and cooperative governance,” Main said in a statement, adding that the devolution provides assured resources to states to effectively plan and implement development programmes.
Highlighting the allocation for Arunachal Pradesh, the Deputy Chief Minister, who also holds the Finance, Planning and Investment portfolios, said that under the Budget Estimates 2025-26, the state was allocated ₹24,992.35 crore with a horizontal share of 1.757 per cent.
“In the revised estimate 2025-26, the allocation stands ₹24,474.51 crore, reflecting a marginal adjustment,” he said.
Referring to the upcoming fiscal year, Main said that for the year 2026-27, Arunachal Pradesh has been allocated ₹20,665.48 crore with a revised horizontal share of 1.354 per cent under the 16th Finance Commission.
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He explained that the comparatively higher share under the 15th Finance Commission took into account the unique situation of the state.
“Arunachal Pradesh’s vast geographical expanse, rugged terrain, sparse population, strategic international borders and high infrastructure costs were recognized earlier,” Main said.
The 16th Finance Commission has revised the horizontal share based on updated criteria and data, but the crucial 41 percent vertical shift remains intact, he added.
The Deputy Chief Minister also mentioned that the Union Budget 2026-27 has made substantial provision for the states through Finance Commission grants.
“All around ₹1.4 lakh crore as Finance Commission grants to states, including support for rural and urban local bodies and disaster management,” he said, adding that this would significantly strengthen grassroots-level service delivery in Arunachal Pradesh.
Reiterating the approach of the state government, Main said the state government is committed to prudent revenue management and effective utilization of resources.
“The state government will continue to work closely with the Center to ensure that Arunachal Pradesh’s development priorities proceed with strength, balance and sustainability,” he added.
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