Union Minister Nirmala Sitharaman speaks in the Lok Sabha during the Budget Session of Parliament in New Delhi on March 25, 2026. Photo: Sansad TV/ANI Video Grab
Finance Minister Nirmala Sitharaman on Wednesday (March 25, 2026) strongly reiterated the Centre’s right to collect deposits and surcharges, saying the Constitution allows it and the Center will continue to use the provision.
However, she also added that in the last six years, the government spent 105% of what it collected through taxes and surcharges in the states. This means that her expenses exceeded her collections.
Parliamentary Budget Session Update on 25 March 2026
She was reacting to the Lok Sabha debate on the Finance Bill 2026, which was passed on Tuesday after her speech ended.
‘we’ll do it’
“The framers of the Constitution knew what they were doing and we all pay respect to them,” Ms Sitharaman said in response to comments made by several members of Parliament on the Centre’s collection of fees and surcharges which are not part of a divisible fund that can be shared with states.
“There is a provision for collection of cesses and surcharges which are given to the central government,” she added. “There is a provision so we can use it, we will use it, just as there are several provisions given to the states to levy a tax on certain items that have nothing to do with the divisible pool.”
The Union Finance Minister further said that the Center spent more on providing schools, hospitals and roads than it collected through the respective cesspools. She gave examples of the Samagra Shiksha Midday Meal Scheme and programs under the National Food Security Act and the National Health Mission.
More spent than collected
“Resources from many countries are 100% transferred to the states,” Ms. Sitharaman said. “In fact, if it was part of the distribution fund, they would only get 41% of it. I want to highlight the fact that there has been 105% utilization. We spend more than we collect.”
She said that in the six-year period between 2019-20 and 2024-25, the Center collected ₹15.14 crore through various cesses and surcharges and sent ₹15.97 crore to the states under various schemes.
“Similarly, in terms of Health and Education Cess, an extra ₹74,000 was spent over and above what was collected under the cess,” Ms. Sitharaman said. “What was collected was ₹ 7.03 crore in 2014-15 and 2026-27. In contrast, the total utilization is ₹ 7.7 crore.”
Fiscal performance
The finance minister also defended the government’s fiscal and debt management, saying it compared favorably with other major economies.
She pointed out that the centre’s fiscal deficit has been reduced to a projected 4.3% for 2026-27 from 9.3% in 2020-21 hit by the COVID-19 pandemic.
“Global comparisons are also important,” noted Ms. Sitharaman. “Since 2008, the world’s total indebtedness has increased by 41%. China’s debt has exploded by 139%. India has actually reduced its total debt burden by 4% of GDP.”
“US debt to GDP ratio is 124%, China 88%, Japan over 250%,” she added. “India combined (centre and states combined), debt to GDP is around 83%. It is lower than most major economies and on a downward path.”
Published – 25 March 2026 17:30 IST
