The Union Government has released an additional Rs 1,09,019 crore in tax devolution to state governments to accelerate capital spending and support welfare projects ahead of the festive season.
Centre Boosts State Funds Ahead of Festive Season
New Delhi [India], October 31 (ANI): The Union Government on Saturday released an additional Rs 1,09,019 crore in tax devolution to state governments ahead of the festive season to help them accelerate capital spending and meet development and welfare-related expenditure, the Ministry of Finance said. The funds were released on Saturday, over and above the regular monthly tax devolution, marking the second additional instalment in the current financial year 2026-27.
In an official release, the Finance Ministry said, “The Union Government has released additional instalment of tax devolution to State Governments amounting to Rs. 1,09,019 crore on 31st October 2026, which is in addition to the regular monthly devolution.” The ministry said the additional allocation was made “in view of the upcoming festive season and to enable States to accelerate capital spending, and also to finance their development/ welfare related expenditure.”
State-wise Allocation Details
According to the state-wise allocation released by the ministry, Uttar Pradesh received the highest amount of Rs 19,208 crore, followed by Bihar at Rs 10,845 crore and Madhya Pradesh at Rs 8,010 crore. West Bengal received Rs 7,866 crore, Maharashtra Rs 7,022 crore and Rajasthan Rs 6,460 crore. Among other major states, Odisha received Rs 4,819 crore, Andhra Pradesh Rs 4,597 crore, Karnataka Rs 4,504 crore, Tamil Nadu Rs 4,466 crore and Gujarat Rs 4,094 crore. The allocation also included Rs 3,660 crore for Jharkhand, Rs 3,602 crore for Chhattisgarh, Rs 3,552 crore for Assam, Rs 2,597 crore for Kerala and Rs 2,370 crore for Telangana.
Financial Context and Framework
This is the second additional tax devolution instalment released by the Centre in FY27. Earlier, on August 1, the government released Rs 1,09,019 crore to states as an advance instalment to support capital and developmental expenditure. Tax devolution refers to the distribution of a share of central tax collections among state governments, providing them with resources to finance their expenditure priorities. Under the framework accepted by the government following the recommendations of the 16th Finance Commission, states are entitled to 41 per cent of the divisible pool of central taxes. The Union Budget 2026-27 has estimated tax devolution to states at Rs 15.26 lakh crore, compared with Rs 13.93 lakh crore in the revised estimates for 2025-26. (ANI)
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