Constitution makers knew what they were doing: FM Sitharaman defends Centre’s cess collections

FM Nirmala Sitharaman defends Centre's cess collections, emphasizing constitutional rights and states' benefits exceeding collected amounts.

Finance Minister Nirmala Sitharaman on Wednesday (March 25, 2026) emphatically reiterated the Centre’s right to collect cesses and surcharges, saying the Constitution allowed it and the Centre would continue to use this provision. 

However, she also added that, over the last six years, the government has spent on the States 105% of what it had collected through cesses and surcharges. That is, its spending has exceeded its collections. 

Parliament Budget Session updates on March 25, 2026

She was replying to the Lok Sabha debate on the Finance Bill 2026, which was passed on Tuesday following the conclusion of her speech.

“The Constitution makers knew what they are doing, and we all pay respects to them,” Ms. Sitharaman said, in response to comments by several Members of Parliament about the Centre’s levy of cesses and surcharges that are not part of the divisible pool that is shareable with the States. 

“There is a provision for levying cesses and surcharges, which is given to the Central Government,” she added. “There is a provision for us to use it, we will use it, just as there are several provisions given to the States to levy tax on certain items, which has nothing to do with the divisible pool.”