The central government has released more than Rs 1.78 lakh crore to states as part of its tax devolution, according to an announcement made by the Finance Ministry on Thursday. This release, which comes ahead of the festive season, is significantly higher than the usual monthly devolution of Rs 89,086.50 crore.
In its statement, the Finance Ministry confirmed that this devolution includes one advance installment in addition to the regular installment for October 2024. The decision to provide the additional funds was taken to help states accelerate capital spending and finance development and welfare-related expenditures during the festive season.
Major Allocations to Key States
The largest allocation from the tax devolution went to Uttar Pradesh, which received Rs 31,962 crore. Bihar followed with Rs 17,921 crore, Madhya Pradesh with Rs 13,987 crore, and West Bengal with Rs 13,404 crore. This substantial funding underscores the Centre’s commitment to ensuring that states have sufficient financial resources to undertake critical development projects.
The enhanced financial support will assist state governments in boosting their capital expenditures. These funds are expected to be used for vital infrastructure projects such as road construction, public facilities, and other development initiatives. The move aims to sustain growth and enable states to continue implementing crucial welfare programs.
In addition to the larger states, other allocations include Rs 7,211 crore to Andhra Pradesh, Rs 6,197 crore to Gujarat, and Rs 7,268 crore to Tamil Nadu. Northeastern states also received significant amounts, with Meghalaya allocated Rs 1,367 crore, Tripura receiving Rs 1,261 crore, and Manipur getting Rs 1,276 crore.
Financial Stability Amid Global Economic Challenges
As India faces global economic challenges, the Centre’s move to release additional funds highlights its focus on ensuring financial stability for states. This initiative will help states maintain momentum in developmental projects and improve infrastructure, ultimately fostering the country’s overall growth.
Understanding Tax Devolution
Tax devolution is the process of distributing net tax proceeds between the Union and states in India, as recommended by the Finance Commission. The Commission’s recommendations ensure that states receive their fair share of tax revenues, enabling them to meet their unique development and welfare needs.
