In a bid to improve States’ liquidity position ahead of the “forthcoming festivities and the New Year”, the Union government on Friday said it had released an additional tranche of tax devolution dues of nearly ₹73,000 crore to State governments.
The latest transfer of devolution dues amounting to ₹72,961.21 crore is in “addition to the tax devolution installment due to States on 10 January, 2024 and the installment of ₹72,961.21 crore already released on 11 December 2023”, the Finance Ministry said in a statement.
To be clear, the tax devolutions transferred to States as per the statement were in line with the Budget estimates for the year, and it was only the timing of the funds release that has been tweaked.
“The amount and frequency can vary every year, but the tax devolution amount in totality is governed by the Budget estimates, until the revised estimates are presented,” an official said.
“In view of the forthcoming festivities and the New Year, the Union Government has authorised the release of an additional installment of tax devolution amounting to ₹72,961.21 crore to strengthen the hands of State Governments for financing various social welfare measures and infrastructure development schemes,” the ministry said.
