The Union Government released a tax devolution of ₹1,73,030 crore to state governments on Friday, up from ₹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 stated.
The funds released on Friday include 26 states. Among the released funds are ₹13,017.06 crore for West Bengal, ₹7,002.52 crore for Andhra Pradesh, ₹6,310.40 crore for Karnataka, and ₹5,412.38 crore for Assam.
Centre released ₹5,895.13 crore for Chhattisgarh, ₹1,436.16 crore for Himachal Pradesh, ₹3,330.83 crore for Kerala, ₹3,126.65 crore for Punjab, and ₹7,057.89 crore for Tamil Nadu.
Other states receiving funds include ₹31,039.84 crore for Uttar Pradesh, ₹10,930.31 crore for Maharashtra, ₹6,017.99 crore for Gujarat, ₹13,582.86 crore for Madhya Pradesh, ₹1,238.9 crore for Manipur, and ₹1,327.13 crore for Meghalaya.
Tax devolution is the process of distributing the net proceeds of taxes collected by the Union government to the states. The Union government distributes taxes to the 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% of the central government's divisible tax pool be allocated to states for the period 2021-26, a process known as vertical devolution.
It also recommended criteria for distributing the funds among states, known as horizontal devolution. These criteria include ‘income distance,’ which reflects the difference in a state's income from the state with the highest per capita income, the state's population size based on the 2011 Census, and the proportion of dense forests in each state.
The strong collection of taxes in a fast-growing economy has enabled the Centre to pass on more taxes to the states.
State Allocation (in ₹ Crore)
- Andhra Pradesh: ₹7002.52
- Arunachal Pradesh: ₹3040.14
- Assam: ₹5412.38
- Bihar: ₹17403.36
- Chhattisgarh: ₹5895.13
- Goa: ₹667.91
- Gujarat: ₹6017.99
- Haryana: ₹1891.22
- Himachal Pradesh: ₹1436.16
- Jharkhand: ₹5722.10
- Karnataka: ₹6310.40
- Kerala: ₹3330.83
- Madhya Pradesh: ₹13582.86
- Maharashtra: ₹10930.31
- Manipur: ₹1238.90
- Meghalaya: ₹1327.13
- Mizoram: ₹865.15
- Nagaland: ₹984.54
- Odisha: ₹7834.80
- Punjab: ₹3126.65
- Rajasthan: ₹10426.78
- Sikkim: ₹671.35
- Tamil Nadu: ₹7057.89
- Telangana: ₹3637.09
- Tripura: ₹1225.04
- Uttar Pradesh: ₹31039.84
- Uttarakhand: ₹1934.47
- West Bengal: ₹13017.06
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