New Delhi: The Center on Friday announced that it has released the 14th installment of tax devolution of more than Rs 1.40 lakh crore to states. Ministry of Finance in a press release said that as against normal monthly devolution of Rs 70,159 crore, the government has released tax devolution to state governments amounting to Rs 1,40,318 crore to "strengthen the hands of states to accelerate their capital and developmental expenditure."
"The Union Government has released 14th installment of tax devolution to state governments amounting to Rs 1,40,318 crore today, as against normal monthly devolution of Rs 70,159 crore," the finance ministry said in a statement on Friday.
This is in line with the commitment of the Union government to strengthen the hands of states to accelerate their capital and developmental expenditure, it added.
As of now, the Center distributes 41 per cent of the taxes it has collected to the states over the course of a fiscal year in 14 installments.
Tax Devolution's goal is to make recommendations for dividing tax net proceeds between the Union and the states. Making suggestions for how to divide the net proceeds of taxes between the Union and the states is one of the main duties of a finance commission, as per Article 280 (3), (a) of the Constitution.
According to a report by Indian Express, in addition to the customary monthly payment of tax devolution to states, the Center provided an advance installment in August and November 2022, easing the fiscal pressure on the states.
As per data by Controller General of Accounts, the Centre has devolved Rs 6.68 lakh crore to states in the current financial year during April-January, up 22.4 per cent from last year, the report added.
Tax devolution to the states was anticipated to total Rs 8.17 lakh crore in the Budget for 2022–2023; however, this amount was scaled up to Rs 9.16 lakh crore in the revised estimates, up from Rs 8.98 lakh crore devolved the previous year.