Union Funds 2026: No affect of points with U.S. in customs responsibility cuts, says Nirmala Sitharaman

The difficulty with the U.S. or the continued negotiations with that nation on a commerce deal didn’t have an effect on the Funds-making course of or affect the choice to take away Customs tariffs on a number of key objects, Finance Minister Nirmala Sitharaman stated on Monday (February 2, 2026). 

Talking a day after laying the report of the Sixteenth Finance Fee (sixteenth FC) earlier than Parliament, the Finance Minister added that the Centre has already made a begin in direction of sharing cesses with the States, through the use of the proceeds of the Well being se Nationwide Safety Cess on public well being, which is constitutionally a State topic. 

‘No US affect’

“The U.S. matter had no affect on us,” Ms. Sitharaman stated at a press interplay, in response to a question from The Hindu. “For the final two years, on Customs, each Funds had bulletins, and since final 12 months I’ve overtly been saying that Customs reforms is the subsequent one and that I’d deliver that about throughout this Funds. As a continuation of that, this has occurred.”

The difficulty positive factors relevance as a result of, a number of of the Customs responsibility relaxations introduced in Funds 2026 — resembling these on electronics & parts, semiconductors, medical gadgets, choose chemical compounds, civil aviation components, and clear power inputs — had been a part of the calls for the U.S. crew negotiating the commerce deal had made on India.

The Minister added that Funds 2025 had led to revenue tax reforms, whereas reforms of the Items and Providers Tax have been carried out later than 12 months, in September. 

“These have been all part of the bigger scheme of issues for the Indian residents,” she stated. “The Customs fee choices have been taken retaining the Indian residents in thoughts.”

Making a begin with States  

Ms. Sitharaman had stated in her Funds speech that the Centre had accepted the suggestions of the sixteenth FC. 

In its report, the sixteenth FC had referred to as for a “grand discount” between the Centre and the States, whereby the Centre would come with extra cesses and surcharges within the pool of funds divisible with the States, and the States would agree to simply accept a smaller share of this bigger pool. 

“We’ve got accepted the suggestions of the Finance Fee, however on this explicit query, it was a suggestion greater than a suggestion,” Ms. Sitharaman stated on Monday. “As it’s, I feel I’ve made a starting once I dedicated that, though it’s a cess, a portion of the Public Well being to Nationwide Safety cess [on pan masala] could be spent on public well being, which is a State topic.” 

“That cess, basically levied on pan masala, is totally the Centre’s,” she defined. “Regardless of that, we had on our personal supplied {that a} portion of it might go to the States.”

Nice demand for capex loans

Ms. Sitharaman stated that there was “nice demand” amongst States for the Centre to extend the quantum of 50-year interest-free loans it was giving them underneath the Scheme for Particular Help to States for Capital Funding (SASCI).

The Centre had in Funds 2026 elevated the quantum of the loans underneath this scheme to ₹2 lakh crore for 2026-27 from Rs 1.5 lakh crore for 2025-26. 

“There may be nice demand for us to extend it,” she stated. “State finance ministers demanded it within the pre-budget assembly I held with them. We elevated it. However there may be way more scope for the States to make use of it. Proposals from some States take too lengthy to return, regardless of them wanting it. Their paperwork takes too lengthy.”