The Union Government has announced a significant tax devolution to state governments, releasing ₹1,73,030 crore in January 2025. This amount surpasses the ₹89,086 crore distributed in December 2024. The move aims to boost states’ capital expenditures and fund their developmental and welfare-related initiatives.
Key Highlights:
- Purpose of Devolution:
- The increased allocation is intended to support states in accelerating infrastructure projects and fulfilling welfare commitments.
- It provides critical financial backing for development-related activities.
- State-wise Allocations:
- The distribution includes major allocations such as ₹31,039.84 crore for Uttar Pradesh, ₹17,403.36 crore for Bihar, and ₹13,017.06 crore for West Bengal.
- Other notable distributions include ₹10,930.31 crore for Maharashtra, ₹10,426.78 crore for Rajasthan, and ₹7,057.89 crore for Tamil Nadu.
- Comparative Increase:
- This release is nearly double the amount disbursed in the previous month, showcasing the government’s commitment to empowering state governments financially.
The government’s focus on higher tax devolution reflects its strategy to ensure states are adequately equipped to meet their fiscal needs and bolster economic growth across regions.
