Govt Releases Two Instalments Of Tax Devolution Of Rs 1.16 Lakh Crore To States

Finance ministry said that this is in line with the commitment of the Government of India to strengthen the hands of states to accelerate their capital and developmental expenditure

The Centre had released Rs 8.8 lakh crore to the states in 2021-22, up from Rs 7.4 lakh crore in 2020-21 and more than Rs 6.7 lakh crore budgeted for the year.

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The central government on Wednesday released two instalments of tax devolution to state governments amounting to Rs 1.16 lakh crore as against normal monthly devolution of Rs 58,332.86 crore.

The Ministry of Finance in its news release on Wednesday said, “This is in line with the commitment of the Government of India to strengthen the hands of States to accelerate their capital and developmental expenditure.”

The Centre had released Rs 8.8 lakh crore to the states in 2021-22, up from Rs 7.4 lakh crore in 2020-21 and more than Rs 6.7 lakh crore budgeted for the year. Nearly half of the Rs 8.8 lakh crore in 2021-22 was released in fourth quarter. After releasing Rs 2.4 lakh crore in February 2022, it released Rs 95,100 crore in March-end.

Earlier this month, the Department of Expenditure under the Ministry of Finance has released the third monthly instalment of Post Devolution Revenue Deficit (PDRD) Grant of Rs 7,183.42 crore to 14 states, according to a release by Ministry of Finance.  

According to that release, the grant has been released as per the recommendations of the Fifteenth Finance Commission.

The Fifteenth Finance Commission has recommended a total Post Devolution Revenue Deficit Grant of Rs 86,201 crore to 14 states for FY22-23.

The recommended grant is released by the Department of Expenditure to the recommended states in 12 equated monthly instalments. With the release of third instalment for the month of June, 2022, the total amount of Revenue Deficit Grants released to the states in 2022-23 has gone up to Rs 21,550.25 crore.

The Post Devolution Revenue Deficit Grants are provided to the states under Article 275 of the Constitution.  The grants are released to the states as per the recommendations of the successive Finance Commissions to meet the gap in Revenue Accounts of the states post devolution.

State-wise distribution of net proceeds of Union taxes and duties for August 2022

Sl. No    Name of state                 Total (Rs crore)

1            Andhra Pradesh              4,721.44

2            Arunachal Pradesh         2,049.82

3            Assam                             3,649.30

4            Bihar                               11,734.22

5            Chhattisgarh                   3,974.82

6            Goa                                 450.32

7            Gujarat                            4,057.64

8            Haryana                          1,275.14

9            Himachal Pradesh           968.32

10          Jharkhand                       3,858.12

11          Karnataka                       4,254.82

12          Kerala                             2,245.84

13          Madhya Pradesh            9,158.24

14          Maharashtra                   7,369.76

15          Manipur                         835.34

16          Meghalaya                     894.84

17          Mizoram                        583.34

18          Nagaland                       663.82

19          Odisha                           5,282.62

20          Punjab                           2,108.16

21          Rajasthan                      7,030.28

22          Sikkim                            452.68

23          Tamil Nadu                    4,758.78

24          Telangana                      2,452.32

25          Tripura                           826

26          Uttar Pradesh                20,928.62

27          Uttarakhand                  1,304.36

28          West Bengal                  8,776.76

              Total                              1,16,665.72

Source: Ministry of Finance