Centre releases additional Rs 1.09 lakh crore to states ahead of festive season; check state-wise allocation

The Centre on Saturday released an additional tax devolution instalment of Rs 1.09 lakh crore to state governments, over and above the regular monthly allocation. This is the second additional instalment released during the current financial year. The Union government has transferred Rs 1,09,019 crore to states, the Finance Ministry said in a statement.

The additional funds have been released ahead of the festive season to give states greater financial flexibility and help them step up capital expenditure, besides meeting development and welfare-related spending requirements.

"This release is in view of the upcoming festive season and to enable states to accelerate capital spending, and also to finance their development/welfare related expenditure," the ministry said.

The official Ministry of Finance handle also announced that the amount was being released as an advance instalment of tax devolution to help states accelerate capital spending and meet their development and welfare expenditure.

State-wise tax devolution: How much did each state receive?

Uttar Pradesh received the highest allocation of Rs 19,208 crore, followed by Bihar with Rs 10,845 crore. Madhya Pradesh was allocated Rs 8,010 crore, while West Bengal received Rs 7,866 crore.

Maharashtra received Rs 7,022 crore, followed by Rajasthan at Rs 6,460 crore and Odisha at Rs 4,819 crore. Andhra Pradesh was allocated Rs 4,597 crore, Karnataka Rs 4,504 crore and Tamil Nadu Rs 4,466 crore.

Gujarat received Rs 4,094 crore, while Chhattisgarh and Jharkhand were allocated Rs 3,602 crore and Rs 3,600 crore, respectively. Assam received Rs 3,552 crore, followed by Kerala at Rs 2,597 crore, Telangana at Rs 2,370 crore and Punjab at Rs 2,176 crore.

Haryana was allocated Rs 1,484 crore, while Arunachal Pradesh received Rs 1,476 crore and Uttarakhand Rs 1,244 crore. Himachal Pradesh was allocated Rs 996 crore.

Among other states, Tripura received Rs 699 crore, Meghalaya Rs 688 crore, Manipur Rs 682 crore, Mizoram Rs 615 crore and Nagaland Rs 524 crore. Goa and Sikkim received Rs 398 crore and Rs 365 crore, respectively.

How does tax devolution work?

Under the existing arrangement, 41% of the taxes collected by the Centre is devolved among state governments. The amount is distributed in 14 instalments during a financial year. The additional release is expected to provide states with more resources to fund infrastructure projects and other development activities, while also supporting their spending requirements during the festive season.