Centre transfers additional Rs 72,961 crore to states above budgeted tax devolution

Finance ministry says funds will allow the states to finance various social welfare measures and infrastructure development schemes

The government has released one advance instalment, in addition to the regular instalment due in June 2023, to aid states push up capital spending. It will also help finance their development/welfare-related expenditure and also to make available resources for priority projects/ schemes. Currently, 41% of taxes collected by the centre is devolved in 14 instalments to states during a fiscal year.

Tax devolution is a major source of funds for states, used for spending on development, welfare and priority-sector projects and schemes

This installment is in addition to the tax devolution installment due to the states on January 10, 2024, and the installment of Rs 72,961.21 crore already released on December 11, 2023.

Karnataka CM Siddaramaiah said MLAs & MPs will protest in Delhi tomorrow against the allegedly reduced tax devolution & grants Centre was transferring to states, including to Karnataka.

The Centre is mulling over extending the deadline for states to repay their off-budget borrowings until FY27. This would provide more headroom to states, whose borrowings for FY24 are expected to rise by 28% to ₹6.7 lakh crore, to tap the market as they deal with the impact of Covid-19. The Centre cleaned up its own budget last year by repaying all off-budget borrowings, and many states have begun to do the same since the Centre subjected the off-budget debt to strict oversight.

As per the norms, tax devolutions to states are made in 14 instalments in a year, with four instalments released in the last two months.

New Delhi [India], June 10 (ANI): Finance Ministry has announced the release of an additional installment of tax devolution to states for June 2024, in a move to support state finances and spur economic development. The total amount released to states for June now stands at Rs 1,39,750 crore. This decision aims to provide states […]

The announcement has been met with appreciation from Tripura Chief Minister Manik Saha, who acknowledges the funding's potential to boost infrastructure and expand the scope of welfare schemes in the state.