- The Centre released an additional Rs 1.09 lakh crore as tax devolution to states on Aug 1
- This advance aims to improve states' cash flows for capital projects and economic growth
- The transfer is over and above the regular monthly tax devolution scheduled for Aug 10
The Centre on Saturday released an additional Rs 1.09 lakh crore as tax devolution to states, front-loading funds to bolster their finances and support capital expenditure and development works.
Tax devolution constitutes states' constitutionally mandated share of the Centre's divisible tax pool and is a key source of untied revenue for state governments.
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By advancing this instalment ahead of schedule, the Centre is seeking to improve cash flows for states, allowing them to fast-track capital projects, meet development commitments and support economic growth without waiting for the routine monthly transfer.
The Rs 1,09,019 crore transfer, made on Aug. 1, comes over and above the regular monthly tax devolution scheduled for Aug. 10, according to the Finance Ministry.
The advance release is intended to provide states with greater fiscal headroom to speed up infrastructure creation, welfare programmes and other developmental initiatives.
The government said the move reflects its commitment to strengthening the financial position of states, enabling them to sustain public investment and maintain the pace of economic activity.
Among the beneficiaries, Uttar Pradesh received the largest allocation at Rs 19,208 crore, followed by Bihar with Rs 10,845 crore and Madhya Pradesh with Rs 8,010 crore.
West Bengal was allocated Rs 7,866 crore, while Maharashtra received Rs 7,022 crore and Rajasthan Rs 6,460 crore.
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Other major allocations include Odisha at Rs 4,819 crore, Andhra Pradesh at Rs 4,597 crore, Karnataka at Rs 4,504 crore, Tamil Nadu at Rs 4,466 crore, and Gujarat at Rs 4,094 crore.
Among the northeastern states, Assam received Rs 3,552 crore, while Arunachal Pradesh was allocated Rs 1,476 crore.
Smaller states such as Sikkim, Goa, Nagaland, Mizoram, and Tripura received allocations based on the Finance Commission's devolution formula.
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