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2 Feb 2026·Source: The Indian Express
4 min
EconomyPolity & GovernanceNEWS

Delhi Receives ₹1,348 Crore in Union Budget 2026-27, Same as Last Year

Delhi's budget allocation remains unchanged at ₹1,348 crore in the Union Budget.

Delhi Receives ₹1,348 Crore in Union Budget 2026-27, Same as Last Year

Photo by shalender kumar

Delhi has received ₹1,348 crore in the Union Budget 2026-27, the same as the previous year. This amount is for capital transfers to the Union Territories, including Delhi. The total amount of taxes received include: Corporation tax of ₹1348 crore, Income tax of ₹968.01 crore, and Capital gains tax of ₹380 crore. The Delhi government's allocated funds remain consistent with the previous budget.

Key Facts

1.

Allocation for Delhi: ₹1,348 crore

2.

Corporation tax received: ₹1348 crore

3.

Income tax received: ₹968.01 crore

4.

Capital gains tax received: ₹380 crore

UPSC Exam Angles

1.

GS Paper II: Governance, Constitution, Polity, Social Justice

2.

Understanding the financial relations between the Union and Union Territories

3.

Statement-based MCQs on constitutional provisions and acts related to UTs

Visual Insights

Key Budget Figures for Delhi (2026-27)

Highlights the allocated budget and tax revenue for Delhi in the Union Budget 2026-27.

Capital Transfers to Delhi
₹1,348 Crore

Represents the central government's financial assistance for capital projects in Delhi.

Corporation Tax Revenue
₹1,348 Crore

Indicates the contribution of corporate taxes to Delhi's revenue.

More Information

Background

The allocation of funds to Union Territories like Delhi is a long-standing practice, rooted in the constitutional framework governing the relationship between the Union and its territories. The Constitution of India outlines the powers and responsibilities of the Union government concerning Union Territories. These territories, unlike states, are directly administered by the central government, necessitating financial allocations through the Union Budget. The process of allocating funds to Union Territories has evolved over time. Initially, these allocations were primarily driven by developmental needs and infrastructure projects. However, with the changing economic landscape and the increasing autonomy granted to some Union Territories, the allocation criteria have become more nuanced. Factors such as population, economic performance, and specific developmental goals now play a significant role in determining the quantum of funds allocated. The Finance Commission also plays a role in recommending principles governing grants-in-aid to states, which indirectly influences the allocation to UTs. The legal and constitutional framework governing the financial relations between the Union and Union Territories is primarily defined by Article 239 to 241 of the Constitution. These articles provide the basis for the administration and governance of Union Territories. Additionally, the Government of National Capital Territory of Delhi Act, 1991, provides a specific framework for Delhi, granting it a legislative assembly and a council of ministers, while still retaining significant control with the Lieutenant Governor appointed by the central government.

Latest Developments

In recent years, there has been a growing emphasis on increasing the financial autonomy of Union Territories. This is reflected in the debates surrounding the devolution of funds and the allocation of resources for specific projects. The NITI Aayog has played a key role in advocating for a more equitable distribution of resources, taking into account the unique needs and challenges faced by each Union Territory. However, the allocation of funds to Union Territories remains a contentious issue, with different stakeholders holding varying perspectives. Some argue that the current allocation criteria are biased towards larger and more developed Union Territories, while others contend that the allocation should be based on performance and the ability to effectively utilize the funds. The Delhi government, for example, has often voiced concerns about the adequacy of funds allocated to it, given its status as the National Capital Territory and its significant developmental needs. Looking ahead, it is expected that the allocation of funds to Union Territories will continue to be a subject of debate and discussion. The government is likely to explore new mechanisms for ensuring a more equitable and efficient distribution of resources, taking into account the evolving needs and priorities of each Union Territory. The role of institutions like the Finance Commission and the Comptroller and Auditor General of India (CAG) will be crucial in ensuring transparency and accountability in the allocation and utilization of funds.

Frequently Asked Questions

1. What is the key takeaway regarding Delhi's budget allocation in the Union Budget 2026-27?

Delhi's budget allocation remains unchanged at ₹1,348 crore in the Union Budget 2026-27, the same as the previous year.

2. For UPSC Prelims, what are the key facts to remember about Delhi's Union Budget allocation?

The key facts to remember are: Allocation for Delhi is ₹1,348 crore, Corporation tax received is ₹1348 crore, Income tax received is ₹968.01 crore, and Capital gains tax received is ₹380 crore.

3. What are capital transfers to Union Territories, and why are they important?

Capital transfers are funds allocated by the Union government to Union Territories like Delhi for development and infrastructure projects. They are important because Union Territories are directly administered by the central government, and these funds support their essential functions and growth.

4. Why is Delhi's budget allocation newsworthy, given that it's the same as last year?

The consistency in Delhi's budget allocation is newsworthy because it reflects the ongoing financial relationship between the Union government and Delhi. In a dynamic economic environment, maintaining the same level of funding can raise questions about adequacy and prioritization.

5. What is the constitutional basis for the Union government's allocation of funds to Union Territories like Delhi?

The Constitution of India outlines the powers and responsibilities of the Union government concerning Union Territories. These territories, unlike states, are directly administered by the central government, and the allocation of funds is part of this administrative responsibility.

6. How might the unchanged budget allocation impact development projects in Delhi?

An unchanged budget allocation could limit the scope and pace of new development projects in Delhi. It might require the Delhi government to prioritize existing projects and seek alternative funding sources for new initiatives.

7. What are the different types of taxes that contribute to Delhi's revenue, as mentioned in the article?

The different types of taxes mentioned are: Corporation tax (₹1348 crore), Income tax (₹968.01 crore), and Capital gains tax (₹380 crore).

8. What are the recent developments regarding the financial autonomy of Union Territories, and how does Delhi fit into this context?

There has been a growing emphasis on increasing the financial autonomy of Union Territories, with the NITI Aayog advocating for a more equitable distribution of resources. Delhi's fixed allocation might be viewed in light of these discussions, potentially sparking debates about its financial independence.

9. In your opinion, what reforms are needed to ensure equitable distribution of funds to Union Territories like Delhi?

Reforms could include a formula-based approach that considers factors like population, development needs, and revenue generation capacity of each Union Territory. Increased consultation with the Delhi government during budget allocation could also lead to more effective resource utilization.

10. How does the allocation of ₹1,348 crore to Delhi impact the common citizens of Delhi?

This allocation supports essential services and infrastructure development in Delhi. Consistent funding ensures the continuity of these services, while any limitations could affect the quality and availability of public amenities for the citizens.

Practice Questions (MCQs)

1. Consider the following statements regarding the financial allocations to Union Territories in India: 1. The Union Territories receive financial allocations primarily through the recommendations of the Finance Commission. 2. The Government of National Capital Territory of Delhi Act, 1991 provides a specific framework for Delhi's financial autonomy. 3. All Union Territories have a legislative assembly to decide on the allocation of funds. Which of the statements given above is/are correct?

  • A.1 and 2 only
  • B.2 only
  • C.1 and 3 only
  • D.1, 2 and 3
Show Answer

Answer: B

Statement 1 is INCORRECT: While the Finance Commission recommends principles governing grants-in-aid to states, it doesn't directly determine financial allocations to UTs. These are primarily decided by the Union Government. Statement 2 is CORRECT: The Government of National Capital Territory of Delhi Act, 1991 does provide a specific framework for Delhi, granting it a legislative assembly and a council of ministers, while retaining significant control with the Lieutenant Governor. Statement 3 is INCORRECT: Not all Union Territories have a legislative assembly. For example, Chandigarh and Lakshadweep do not have one.

2. Which of the following taxes contributed to the ₹1,348 crore received by Delhi in the Union Budget 2026-27, as per the news report?

  • A.Goods and Services Tax (GST)
  • B.Corporation Tax
  • C.Customs Duty
  • D.Excise Duty
Show Answer

Answer: B

According to the news report, the ₹1,348 crore received by Delhi in the Union Budget 2026-27 included Corporation Tax. The other taxes mentioned were Income Tax (₹968.01 crore) and Capital Gains Tax (₹380 crore).

3. In the context of Union Territories in India, which of the following statements is NOT correct?

  • A.Union Territories are governed directly by the Central Government.
  • B.All Union Territories have a Lieutenant Governor as their administrator.
  • C.Some Union Territories have their own Legislative Assemblies.
  • D.The President of India appoints the administrators of Union Territories.
Show Answer

Answer: B

Option B is NOT correct. While most Union Territories are administered by a Lieutenant Governor, some are administered by a Chief Commissioner. For example, Chandigarh is administered by a Chief Commissioner.

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