Synopsis: The Union government has released an additional Rs 1,01,603 crore to states as tax devolution ahead of the festive season to accelerate capital spending and welfare projects. Uttar Pradesh, Bihar, and Madhya Pradesh are among the biggest beneficiaries.
Centre’s Festive Season Push
In a significant fiscal move, the Union Finance Ministry on Wednesday announced the release of an additional tax devolution of Rs 1,01,603 crore to state governments. This is over and above the normal monthly devolution due on October 10.
The decision comes amid the festive season, aimed at helping states boost capital expenditure, finance development projects, and sustain welfare-related spending.
State-Wise Allocation
The additional tax devolution has been distributed across states, with Uttar Pradesh receiving the highest share of Rs 18,227 crore, followed by:
- Bihar – Rs 10,219 crore
- Madhya Pradesh – Rs 7,976 crore
- West Bengal – Rs 7,644 crore
- Maharashtra – Rs 6,418 crore
- Rajasthan – Rs 6,123 crore
Other major allocations include:
- Andhra Pradesh – Rs 4,112 crore
- Odisha – Rs 4,601 crore
- Tamil Nadu – Rs 4,144 crore
- Karnataka – Rs 3,705 crore
- Jharkhand – Rs 3,360 crore
Earlier, between April and July 2025, the Centre had transferred Rs 4,28,544 crore as states’ tax share—Rs 61,914 crore higher than the same period last year.
Fiscal Position of the Centre
During April–July 2025, the Centre received Rs 10,95,209 crore, which accounts for 31.3% of the FY26 Budget Estimates (BE):
- Net Tax Revenue: Rs 6,61,812 crore
- Non-Tax Revenue: Rs 4,03,608 crore
- Non-Debt Capital Receipts: Rs 29,789 crore
On the expenditure side, the government spent Rs 15,63,625 crore (30.9% of BE 2025-26), including:
- Revenue Expenditure: Rs 12,16,699 crore
- Capital Expenditure: Rs 3,46,926 crore (for infrastructure projects)
- Interest Payments: Rs 4,46,690 crore
- Major Subsidies: Rs 1,13,592 crore
Economic Implication
The festive-season boost is expected to give states fiscal space to scale up spending on infrastructure and social welfare. Economists suggest this timely move will stimulate demand and growth, while also balancing regional development.
Disclaimer: This article is for informational purposes only and should not be treated as financial or investment advice. Readers are encouraged to verify details with official government releases.
