States get addition instalment of tax devolution of ₹1.09 lakh crore, supported by strong economy, taxes—See break-up

Centre Releases Extra Devolution Instalment

The Union government has released an additional instalment of tax devolution amounting to ₹1,09,019 crore to the states, ahead of the festive season. According to a Finance Ministry press release, the amount was released on 31 October and is intended to help states speed up capital expenditure and meet development and welfare-related spending needs. This is the second additional instalment for the current financial year and comes on top of the regular monthly transfers.

Union Finance Minister Nirmala Sitharaman said in a post on X that the second additional instalment this financial year is backed by stronger economic activity and buoyant tax collections. She added that the release would help states accelerate infrastructure development, finance welfare programmes and give further momentum to economic growth across India.

How the Allocations Break Up

Under the devolution framework, 41% of the taxes collected by the Centre is shared with states across 14 instalments in a fiscal year. Uttar Pradesh received the largest share at ₹19,208 crore, followed by Bihar at ₹10,845 crore and Madhya Pradesh at ₹8,010 crore. West Bengal received ₹7,866 crore, Maharashtra ₹7,022 crore and Rajasthan ₹6,460 crore. Among other major states, Odisha got ₹4,819 crore, Andhra Pradesh ₹4,597 crore, Karnataka ₹4,504 crore, Tamil Nadu ₹4,466 crore and Gujarat ₹4,094 crore. The allocation also included ₹3,660 crore for Jharkhand, ₹3,602 crore for Chhattisgarh, ₹3,552 crore for Assam, ₹2,597 crore for Kerala and ₹2,370 crore for Telangana.

Why It Matters for Businesses

Tax devolution is the mechanism through which a portion of the Centre's tax collections is distributed among state governments, giving them resources to fund their own expenditure priorities. The framework follows the recommendations of the 16th Finance Commission, under which states are entitled to 41% of the divisible pool of central taxes. For businesses, the timing and size o…