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| Central Government Allocates ₹1.39 Lakh Crore to States in June 2024 |
Central Government Devolves ₹1.39 Lakh Crore to States in June
The Indian government has distributed ₹1.39 lakh crore to states as part of its tax revenue devolution for June, as confirmed by the finance ministry. This sum includes an additional installment, with the total release for the month amounting to ₹1,39,750 crore. This significant fund release is intended to bolster development and capital spending at the state level.
FY25 Devolution and Distribution
The Interim Budget for FY25 allocated ₹12.19 trillion for tax devolution to states. As of June 10, the total disbursed amount for FY25 stands at ₹2.8 trillion. The devolution formula, established by the Fifteenth Finance Commission, mandates that 41% of the Centre's tax revenue be distributed to state governments. This formula considers various factors, such as demographic performance, efforts to mobilize tax revenue, geographic area, forest cover, and per capita income.
Current and Future Framework
The Fifteenth Finance Commission's devolution formula will be in effect until FY26. Meanwhile, the Sixteenth Finance Commission, led by Arvind Panagariya, is formulating the framework for FY27-31. This commission's mandate includes assessing the development needs of states, analyzing tax buoyancy trends, and accounting for major obligations of the Centre.
State-specific Allocations
In the recent fund release, specific states received substantial amounts:
- Uttar Pradesh: ₹25,069.88 crore
- West Bengal: ₹10,513.46 crore
- Rajasthan: ₹8,421.38 crore
- Madhya Pradesh: ₹10,970.44 crore
These allocations are expected to facilitate state-level initiatives and development projects, aligning with the broader objectives of equitable growth and fiscal decentralization.
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