Centre releases Rs 1.16 lakh crore tax devolution to states

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Centre releases Rs 1.16 lakh crore tax devolution to states

The central government has released two installments of tax devolution to state governments, amounting to 1.16 lakh crore as opposed to the normal monthly devolution of Rs 58,332. There were 86 crore.

The Ministry of Finance said in a statement that this is in line with the commitment of the Government of India to strengthen the hands of states to accelerate capital and development expenditure.

One of the core tasks of a 15th Finance Commission is to make recommendations regarding the distribution of net proceeds of taxes between the Union and the states. This is the most important task of the Finance Commission, as the share of states in net proceeds of Union taxes is the predominant channel of resource transfer from the Centre to states.

This advance release will help the states pay pending dues and increase allocation for spending on health and infrastructure projects.

The Centre released 8.8 lakh crore to the states in 2021 -- 22, up from Rs 7.4 lakh crore in 2020 -- 21 and more than Rs 6.7 lakh crore budgeted for the year. Nearly half of the 8.8 lakh crore was released in the fourth quarter of 2021 -- 22. In February 2022, after releasing Rs 2.4 lakh crore, it released Rs 95,100 crore in March-end.