Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman chairs the Pre-Budget Consultation Meeting with States and UTs (with legislature), New Delhi, today

1. At a Glance

Annual pre-Budget consultation chaired by Union Finance Minister Smt. Nirmala Sitharaman with States/UTs (with legislature) ahead of Union Budget 2026-27 [S1].
Convened to gather State-level inputs on fiscal devolution, capex support, and sectoral demands — a key expression of cooperative fiscal federalism [S1].
Headline takeaway: States flagged SASCI (Special Assistance to States for Capital Investment) as critical for fast-tracking asset creation [S1].

Meeting held on 10 January 2026, New Delhi, just weeks before presentation of Union Budget 2026-27 [S1].
Continues the pre-Budget consultation tradition; the previous edition (2024-25 cycle) was held in Jaisalmer, Rajasthan [S2].

Pre-Budget consultations with States are an executive convention, not a constitutional requirement, conducted annually by the Department of Economic Affairs, Ministry of Finance.
SASCI launched in 2020-21 as Atmanirbhar Bharat measure to push State capex via 50-year interest-free loans; cumulative release > ₹4.25 lakh crore since 2020-21 [S3].
Scheme expanded to 10 parts (Part-I to Part-X) in 2025-26, mixing untied and reform-linked components [S4].

Chair: Union FM Nirmala Sitharaman; MoS Finance: Pankaj Chaudhary [S1].
Attendees: Governor of Manipur; CMs of Goa, Haryana, Meghalaya, Sikkim, Delhi (UT), J&K (UT); Deputy CMs of Arunachal Pradesh, MP, Odisha, Rajasthan, Telangana; State FMs and other Ministers [S1].
SASCI 2025-26 outlay: ₹1.5 lakh crore total — ₹68,000 cr under Part-I (Untied) + ₹80,000 cr reform/sector-specific [S4].
Disbursed under SASCI 2025-26: ₹83,595 crore to States till 04.01.2026 [S4].
Budget 2026-27 SASCI outlay: ₹2.0 lakh crore as 50-year interest-free capex loans [S3].
Disaster carve-out: States hit by severe natural disasters (as assessed by Inter-Ministerial Central Team / IMCT) in FY 2024-25 may access up to 50% of Part-I allocation [S4].
Nodal ministry: Ministry of Finance, Department of Expenditure [S4].

Economic: SASCI crowds in State capex (States account for ~60% of general government capex); ₹2 lakh cr for FY 2026-27 signals counter-cyclical push amid 7.4% projected real GDP growth [S3].
Legal/Constitutional: Operates outside Finance Commission devolution under Article 280; uses Article 293(3) route for State borrowings (Centre's consent required) — interest-free loans bypass market-rate constraints.
Administrative/Federalism: Reform-linked tranches (Part-II onwards) tie release to sector reforms (urban planning, land records, digitisation) — debated as conditional federalism.
Ethical/Governance: Direct State-Centre dialogue increases transparency; however, opposition-ruled States historically allege uneven access — attendance of Delhi, J&K, Telangana (non-NDA) signals broad participation [S1].

10 Jan 2026: Pre-Budget consultation with States/UTs (with legislature), New Delhi [S1].
FY 2024-25: 40 projects sanctioned in 23 States worth ₹3,295.76 crore under SASCI tourism component [S5].
2023-24: Centre approved ₹56,415 crore for 16 States under SASCI 2023-24 [S6].
Budget 2026-27: SASCI outlay scaled to ₹2 lakh crore [S3].

SASCI launched in FY 2020-21 as part of Atmanirbhar Bharat [S3].
SASCI loans are 50-year, interest-free to States [S3].
SASCI 2025-26 has 10 parts (I-X) [S4].
Part-I of SASCI is "Untied" — States choose projects [S4].
SASCI 2025-26 Part-I allocation: ₹68,000 crore [S4].
Cumulative SASCI release since 2020-21: > ₹4.25 lakh crore [S3].
SASCI 2026-27 budgeted outlay: ₹2 lakh crore [S3].
Disaster-hit States may draw up to 50% of Part-I allocation, certified by IMCT [S4].
Pre-Budget consultation 2024-25 cycle was held in Jaisalmer [S2].
Nodal department for SASCI: Department of Expenditure, Ministry of Finance [S4].
India's projected real GDP growth FY 2025-26: 7.4% [S3].
MoS Finance as of meeting: Pankaj Chaudhary [S1].

GS-II: Indian Polity & Governance — Centre-State financial relations; cooperative federalism.
GS-III: Indian Economy — Government Budgeting; mobilization of resources; public finance.
Plausible stems: 1. "Examine the role of the Scheme for Special Assistance to States for Capital Investment (SASCI) in strengthening fiscal federalism in India." (GS-II/III) 2. "Pre-Budget consultations with States have evolved into a key forum of cooperative fiscal federalism. Discuss." (GS-II) 3. "Conditional capex transfers risk eroding State autonomy. Critically evaluate in the context of SASCI." (GS-II)

16th Finance Commission — concurrent devolution review.
Article 293 & State borrowing limits — legal basis of interest-free loan model.
FRBM Act, 2003 — fiscal deficit interaction with off-Budget loans.
GST Council — parallel federal fiscal forum.
NITI Aayog Governing Council — non-fiscal Centre-State coordination.
Capex multiplier debate (RBI/Economic Survey) — rationale for capex push.
Atmanirbhar Bharat package (2020) — origin of SASCI.
PM Gati Shakti / National Infrastructure Pipeline — capex pipeline absorbing SASCI funds.

SASCI loans are interest-free, not grants — they add to State debt stock (though not to FRBM deficit calc in specific ways).
SASCI is distinct from Finance Commission grants (Art. 280) and CSS transfers.
Tenure is 50 years, not 40 or 25.
Nodal body is Department of Expenditure, not Department of Economic Affairs or NITI Aayog.
The meeting covers States/UTs with legislature (incl. Delhi, J&K, Puducherry) — UTs without legislature are excluded.

[S1] Pre-Budget Consultation Meeting with States and UTs (with legislature), New Delhi — https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2213339 — (tier: 1)
[S2] Pre-Budget Consultation, Jaisalmer — https://pib.gov.in/PressReleseDetailm.aspx?PRID=2086682 — (tier: 1)
[S3] Budget 2026-27 / Year Ender 2025 Dept. of Expenditure — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2212546 — (tier: 1)
[S4] SASCI 2025-26 parts & disbursement — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2212546 — (tier: 1)
[S5] SASCI FY 2024-25 sanctions — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2099157 — (tier: 1)
[S6] SASCI 2023-24 ₹56,415 cr approval — https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=1935378 — (tier: 1)