The Government on Monday released over ₹1.39 lakh crore to the States under the devolution mechanism. Based on the Finance Commission’s formula, 41 per cent of the Centre’s tax revenue is given to the States through the devolution mechanism.
Uttar Pradesh got the highest share with more than ₹25,000 crore, followed by Bihar (₹14,000 crore) and Madhya Pradesh (over ₹10000 crore).
According to a statement, Finance Minister Nirmala Sitharaman reviewed the prevailing economic and fiscal situation with the Finance Secretary T. V. Somnathan and Economic Affairs Secretary Ajay Seth. “It was decided that apart from the regular release of the devolution amount for June 2024, one additional instalment would be released. This cumulatively amounts to ₹1,39,750 crore in the current month,” the statement said. Further, this will enable the State Governments to accelerate development and capital spending.
The Interim Budget 2024-25 has a provision of over ₹12 lakh crore towards devolution of taxes to States. With this release, the total amount devolved (for FY 2024-25) to States till June 10, 2024, is over ₹2.79 lakh crore, the statement said.