Centre Releases Rs 1.73 Lakh Crore Tax Devolution to States as Tax Share

NEW DELHI: The Union Government released a tax devolution of Rs 1,73,030 crore to state governments on Friday, up from the devolution of Rs 89,086 crore in December 2024. A higher amount is being devolved this month to enable states to accelerate capital spending and finance their development and welfare-related expenditures, the Finance Ministry said.

The funds released include Rs 13,017.06 crore for West Bengal, Rs 7,002.52 crore for Andhra Pradesh, Rs 6,310.40 crore for Karnataka, Rs 5,412.38 crore for Assam, Rs 5,895.13 crore for Chhattisgarh, Rs 1,436.16 crore for Himachal Pradesh, Rs 3,330.83 crore for Kerala, Rs 3,126.65 crore for Punjab, and Rs 7,057.89 crore for Tamil Nadu.

Among the other states, Uttar Pradesh has got Rs 31,039.84 crore, Maharashtra Rs 10,930.31 crore, Gujarat Rs 6,017.99 crore, Madhya Pradesh Rs 13,582.86 crore, Manipur Rs 1,238.9 crore, and Meghalaya Rs 1,327.13 crore.

The Union government distributes taxes to states in regular installments based on the recommendations of the Finance Commission. The Finance Commission recommends the share of states in the total net proceeds of all taxes, including corporation tax, personal income tax, and central GST.

The 15th Finance Commission recommended that 41 percent of the central government's divisible tax pool be allocated to states for the period 2021-26. This is known as vertical devolution.

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