NEW DELHI, August 4 — The Central Government announced the release of an additional instalment of tax devolution amounting to ₹1.09 lakh crore to state governments on Tuesday to accelerate developmental and capital expenditure.
This release is in addition to the regular monthly devolution instalment, doubling the funds transferred to states for the month of August. The Ministry of Finance stated that the early release aims to provide states with sufficient liquidity to fund ongoing infrastructure projects and state-specific welfare schemes.
Uttar Pradesh, Bihar, and Madhya Pradesh received the highest shares in the allocation, based on the recommendations of the Finance Commission.
Devolution of taxes and Centre-State financial relations are core economics and polity topics in competitive exams. Candidates should know that Article 270 and Article 280 of the Indian Constitution govern the distribution of tax revenues between the Union and the States based on the Finance Commission's recommendations.