The Finance Ministry on Thursday released ₹1.78 lakh crore to States in tax devolution. “It includes one advance instalment, in addition to the regular instalment due in October 2024. This release is in view of the upcoming festive season and to enable States to accelerate capital spending, and also finance their development/welfare-related expenditure,” a Ministry statement said

The largest share of the funds went to Uttar Pradesh, which received ₹31,962 crore. Bihar followed with ₹17,921 crore, while Madhya Pradesh and West Bengal received ₹13,987 crore and ₹13,404 crore, respectively. The allocation is aimed at ensuring that States have the financial resources needed to stimulate development, especially during a period of increased economic activity ahead of the festive season.

Among other States, Andhra Pradesh received ₹7,211 crore, Tamil Nadu received ₹7,268 crore and Gujarat received ₹6,197 crore. In the North-east, Meghalaya was allocated ₹1,367 crore, Tripura ₹1,261 crore and Manipur ₹1,276 crore.

Ramping up capex

The Finance Ministry noted that the decision to release these funds was aimed at empowering States to ramp up capital spending and support essential welfare and developmental projects. This accelerated funding is intended to boost critical infrastructure projects such as road construction, public facilities, and other State-led development initiatives.

This announcement came after a high-level meeting between the Finance Secretary and the Secretary of the Department of Economic Affairs, emphasising the government’s commitment to sustain economic growth through State-level investments.

The Ministry emphasised that this tax devolution aligns with the recommendations of the Finance Commission, which plays a crucial role in determining the distribution of tax revenue between the Union and States. This year’s devolution reflects the Centre’s ongoing focus on supporting States as they undertake vital infrastructure projects and social welfare initiatives.

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