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Business News/ Economy / Centre released 8.28 lakh crore grants-in-aid to states during FY19-FY23
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Centre released ₹8.28 lakh crore grants-in-aid to states during FY19-FY23

The total amount of grants-in-aid has seen a consistent annual rise from FY2019 to FY2022, before falling to a three-year-low in FY2023

West Bengal received the lion's share of ₹69,465.22 crore during the five years ended FY2023. (Image: Pixabay)Premium
West Bengal received the lion's share of 69,465.22 crore during the five years ended FY2023. (Image: Pixabay)

New Delhi: The central government released over 8.28 lakh crore grants-in-aid to states between FY2019 and FY2023 based on recommendations of successive finance commissions.

West Bengal received the lion's share of 69,465.22 crore during the five years ended FY2023, followed by Uttar Pradesh at 63,152.96 crore, Kerala at 62,496.31 crore and Andhra Pradesh at 59,754.69 crore, according to finance ministry data released on Friday.

Goa, Arunachal Pradesh, and Sikkim received the least funding under the grants at 489.50 crore, 2,129.53 crore, and 2,219.10 crore, respectively.

Grants-in-aid are payments in the form of assistance and contributions made by the Centre to states to fund specific projects.

It is also a significant mode of spending for the Centre for the delivery of public goods. It is used for non-plan revenue deficit of states, elementary education, environment, improving outcomes, maintenance of roads and bridges, local bodies, calamity relief, etc, according to the CAG or Comptroller and Auditor General of India.

Interestingly, the total amount of grants-in-aid has seen a consistent annual rise from FY2019 to FY2022, before falling to a three-year-low in FY2023.

Jammu & Kashmir, which was re-organised into two union territories, namely Jammu & Kashmir, and Ladakh in 2019, didn't receive any grants-in-aid between FY2021 and FY2023.

A finance ministry spokesperson didn't respond to emailed queries.

While the Centre’s capex increased 29% to 4.9 lakh crore during the first half of FY2024, states' capex increased by 52.8% during the same period.

However, several states have lagged behind the Centre in terms of meeting the budgeted capex target.

Based on data available for 23 states, while state capex has increased by a sharp 52.8% annually during first half of FY2024, states have utilised only 25.2% of their budgeted capex during the period, said a recent report by Bank of Baroda.

"However, in terms of meeting the budgeted target, states have been lagging the Centre. Out of budgeted capital expenditure of 8.09 lakh crores, the actual capex is 2.63 lakh crores, which is around 32.3% of the Budgeted amount," the report said.

"This is higher than last year. In fact, in H1FY23, states’ capex spending stood at 25.2% of the budgeted amount," it added.

According to the report, states like Telangana, Madhya Pradesh, Andhra Pradesh, Bihar and Kerala have utilised a large chunk of their capex during the first half of FY24, while Uttar Pradesh Maharashtra, Gujarat and Karnataka have used less than 30% of the budgeted amount during the same period.

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ABOUT THE AUTHOR
Rhik Kundu
Rhik writes about the Indian economy and its crucial indicators. He is constantly navigating corporates, decoding policies, and dabbling with everything in between.
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Published: 23 Feb 2024, 06:27 PM IST
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