Centre Releases Two Tax Devolution Instalments To States Worth ₹ 95,082 Crore
As part of its efforts to stimulate infrastructure investment, the government has given two instalments of tax devolution to states totaling 95,082 crore.
The two instalments were made in addition to the union finance ministry’s regular monthly devolution of Rs 47,541 crore to states. The instalments were disbursed on Monday (November 22), as agreed in a November 15 meeting between Finance Minister Nirmala Sitharaman and state chief ministers and finance ministers.Uttar Pradesh received the most devolution money (Rs 17,056 crore) out of all 28 states, followed by Bihar (Rs 9,563 crore), Madhya Pradesh (Rs 7,463 crore), West Bengal (Rs 7,152 crore), and Rajasthan (Rs 7,152 crore) (Rs 5,729 crore).
The government announced during the November 15 meeting that additional devolution funds totaling Rs 95,082 crores would be disbursed on November 22 to encourage states to focus on infrastructure spending and help them reach their capital expenditure (capex) commitments for the current fiscal year. Finance Minister Nirmala Sitharaman told the media after a marathon meeting with chief ministers of 15 states and finance ministers of other states that the decision to release the funds was made after receiving requests from states for “front loading” of tax devolution funds due to the exceptional year.
She had told reporters that numerous states believed that because there would be no scarcity of finances, they would be able to spend more on infrastructure development.”As a result, I’ve instructed the finance secretary to deliver an additional instalment of tax devolution to the states on November 22.” On that day, two instalments totaling Rs 47,541 crore will be distributed to all states. As a result, the entire payment will be Rs 95,082 crore, according to the finance minister.The finance minister went on to say that states agreed that infrastructure expenditure was critical, and that they needed funding to do so, hence it was decided to provide further tax devolution instalments.According to the 15th Finance Commission’s proposals, states will receive 41% of the divisible tax pool.
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