Centre Releases Rs 72,961 Crore Additional Tax Devolution Share To States

The central government released an additional tax devolution share of Rs 72,961.21 crore to states on Friday, ahead of the new year.

The installment will be followed by another equivalent share on Jan. 10, 2024, the finance ministry stated in a release.

The states' share of 42% of central taxes is distributed in 14 equal instalments every financial year. This would include two additional installments in a year, along with the 12 monthly releases. Each state's share of the total devolution is decided by the 15th Finance Commission's formula.

"In view of the forthcoming festivities and the new year, the union government has authorised the release of an additional instalment of tax devolution amounting to Rs 72,961.21 crore to strengthen the hands of state governments for financing various social welfare measures and infrastructure development schemes," the release said.

This comes at a time when Tamil Nadu has also sought additional funds for disaster relief in flood-affected parts of the state in the aftermath of Cyclone Michuang. The centre's share of Rs 900 crore was fully released by Dec. 12 via two instalments throughout the year, said Finance Minister Nirmala Sitharaman. Tamil Nadu Chief Minister MK Stalin had also met the Prime Minister on Tuesday to declare the situation in Tamil Nadu a natural calamity and release relief funds of Rs 7,033 crore as an interim measure, followed by a permanent relief fund of Rs 12,659 crore.

Tamil Nadu's share of the tax devolution amounts to Rs 2,976.1 crore. West Bengal, another state that had raised concerns over the fund release to the PM, would receive Rs 5,488.88 crore as its share of the devolved amount on Friday.