Government has actually released two tax devolution instalments for statesGovernment has launched two instalments of tax devolution to states totalling Rs 95,082 crore, as a step towards enhancing investment in the facilities sector.The two instalments were released against the normal regular monthly devolution of Rs 47,541 crore which is provided to states by the union finance ministry.The instalments were launched on Monday (November 22) as was decided in a conference held in between financing minister Nirmala Sitharaman and states' chief ministers and financing ministers on November 15.
Out of all the 28 states, Uttar Pradesh received the highest devolution amount (Rs 17,056 crore), followed by Bihar (Rs 9,563 crore), Madhya Pradesh (Rs 7,463 crore), West Bengal (Rs 7,152 crore) and Rajasthan (Rs 5,729 crore).
In order to stimulate states to focus on infrastructure spending and assist them meet their capital investment (capex) targets for the present fiscal year, the government had actually said throughout the November 15 meeting that extra devolution funds due to them amounting to Rs 95,082 crores will be launched on November 22.
Informing the media after a marathon meeting with chief ministers of 15 states and finance ministers of other states, finance minister Nirmala Sitharaman had said that the decision to launch the funds was taken after getting demands from states for front loading of tax devolution funds, as it was a remarkable year.She had actually told reporters that a number of states were of the view that this would assist them in spending more on facilities advancement as there will be no scarcity of funds.
For that reason I have directed the financing secretary to launch an additional instalment of tax devolution on November 22 to the states.
There will be 2 installments of Rs 47,541 crore each which will be launched to all states on that day.
For that reason the total amount will be Rs 95,082 crore, the finance minister had said.The finance minister added that there was a consensus amongst states that facilities costs was essential and for that they require funds, for that reason it was decided to launch additional instalments of tax devolution.As per the recommendations of the 15th Financing Commission, 41 percent of the divisible tax pool is to be devolved to states.