For the festive season, the central government releases Rs 1,78,173 crore to the states as tax devolution

INN/New Delhi, @Infodeaofficial

The Centre announced on Thursday that it has issued tax devolution of Rs 1,78,173 crore to state governments, as opposed to the regular monthly devolution of Rs 89,086.50 crore, in an effort to allow states to increase development and capital spending. Together with the standard installment coming in October, there is also one advance installment included.

The top recipients among the states were 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).

According to a statement from the Union Ministry of Finance, “this release is in view of the upcoming festive season and to enable states to accelerate capital spending, as well as finance their development/welfare related expenditure.”

In FY 2024–25, the federal government would give states and union territories a transfer of Rs 23,48,980 crore, an increase of 11.9% above FY 2023–2024 actuals. The predicted amount of tax revenue that will be devolved to states from the Centre in 2024–25 is Rs 12,47,211 crore, which is a 10.4% increase over the actual amount in 2023–24.

The actuals for FY 2023–24 indicate that the budget estimate of Rs 10,21,448 crore for devolution to the states will be exceeded by an anticipated Rs 1,08,046 crore (an increase of 10.6%).

The BJP-led NDA government announced the distribution of an additional tax devolution installment in June of this year, totalling Rs 1,39,750 crore. In addition to the Rs 72,961 crore that was already given out that month, the Centre granted Rs 1.42 lakh crore in tax devolution to the states in February.

It is projected that the Central government will spend Rs 48,20,512 crore in 2024–25, which represents an increase of 8.5% over 2023–24 actuals.