Government Releases ₹1.78 Lakh Crore as Tax Devolution to States for Festive Season

In a bid to enable states to boost development and capital spending, the Centre on Thursday said it has released tax devolution of Rs 1,78,173 crore to state governments, as against the normal monthly devolution of Rs 89,086.50 crore.

It includes one advance instalment, in addition to the regular instalment due in October.

Among the states, Uttar Pradesh (Rs 31,962 crore), Bihar (Rs 17,921 crore), Madhya Pradesh (Rs 13,987 crore), Maharashtra (Rs 11,255 crore), West Bengal (Rs 13,404 crore), Rajasthan (Rs 10,737 crore), Odisha (Rs 8,068 crore), Andhra Pradesh (Rs 7,211 crore) and Telangana (Rs 3,745 crore) were the top receivers.

“This release is in view of the upcoming festive season and to enable states to accelerate capital spending, and also finance their development/welfare related expenditure,” according to a statement by the Union Ministry of Finance.

The central government will transfer Rs 23,48,980 crore to states and union territories in FY 2024-25, an increase of 11.9 per cent over the actuals of 2023-24.

Devolution to states from the Centre’s tax revenue is estimated to be Rs 12,47,211 crore in 2024-25, an increase of 10.4 per cent over the actuals of 2023-24.

In FY 2023-24, according to the actuals, devolution to states is estimated to be Rs 1,08,046 crore more than the budget estimate of Rs 10,21,448 crore (an increase of 10.6 per cent).

In June this year, the BJP-led NDA government released an additional instalment of devolution of taxes, cumulatively amounting to Rs 1,39,750 crore. The Centre in February had released Rs 1.42 lakh crore in tax devolution to the states, supplementing the Rs 72,961 crore disbursed earlier in the same month.

The Central government is estimated to spend Rs 48,20,512 crore in 2024-25 — an increase of 8.5 per cent over the actuals of 2023-24.

(With inputs from IANS)