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Centre releases ₹1.39 lakh crore to states in June
- The Interim Budget for FY25 had earmarked Rs. 12.19 trillion towards devolution of taxes to states. With this release, the total amount devolved for FY25 to states till 10 June stands at Rs. 2.8 trillion
The Central government has devolved ₹1.39 lakh crore to states as devolution of its tax revenue in June, finance ministry stated on Monday.
The ministry said that apart from the regular release of the devolution amount for the month of June, one additional instalment is released. This release cumulatively amounts to Rs. 1,39,750 crore in the current month. This will enable state governments to accelerate development and capital spending, the ministry stated.
The Interim Budget for FY25 had earmarked Rs. 12.19 trillion towards devolution of taxes to states. With this release, the total amount devolved for FY25 to states till 10 June stands at Rs. 2.8 trillion. Centre devolves 41% of its tax revenue to state governments as part of the formula set by the Finance Commission.
The existing devolution formula is set by the Fifteenth Finance Commission for the five-year period till FY26. States’s share is decided by a formula meant to incentivize demographic performance and each state’s effort to mobilize its own tax revenue. The formula also takes into account geographic area, forest cover and the state’s per capita income.
The Sixteenth Finance Commission chaired by Arvind Panagariya is currently working on evolving the framework for tax devolution for the period from FY27-31. The Commission also examines the development needs of states and trends like tax buoyancy and major obligations of the Centre, while arriving at its recommendation.
Finance ministry stated that in the latest round of fund release, Uttar Pradesh received ₹25,069.88 crore while West Bengal received ₹10,513.46 crore. Rajasthan received ₹8,421.38 crore, while Madhya Pradesh received Rs. 10,970.44 crore.
Devolution of Centre’s tax revenue does not include various cesses and surcharges collected by the union government for specific purposes. (ends)
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Business NewsEconomyCentre releases ₹1.39 lakh crore to states in June
First Published:11 Jun 2024, 09:15 AM IST
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