Union Finance Minister Nirmala Sitharaman
| Photo Credit: ANI

The Centre on Friday (January 10, 2025) released tax devolution of ₹1.73 lakh crore to the state governments to accelerate capital expenditure and finance welfare activities.

“A higher amount is being devolved this month to enable states to accelerate capital spending and finance their development and welfare-related expenditures,” the finance ministry said in a statement.

The Union government has released tax devolution of ₹1,73,030 crore to state governments on Friday, as against the devolution of ₹89,086 crore in December 2024, the ministry added.

Currently, 41% of taxes collected by the Centre is devolved in instalments among states during a fiscal year.

File picture of Congress leader Jairam Ramesh
| Photo Credit: ANI

The Congress slammed the Centre on Monday after it authorised the release of tax devolution to States for June and said this is “third-rate PR” trying to pass off what is legitimately due to States as some “prasad” being distributed.

The Centre on Monday authorised the release of tax devolution of ₹1,39,750 crore to States for June.

It was decided that apart from the regular release of the devolution amount for the month of June 2024, one additional instalment will be released, the Finance Ministry said in a statement.

Congress general secretary Jairam Ramesh said, “The finance ministry has just announced what is being billed as a major tax devolution to States. Undoubtedly this has been done at the behest of the ‘one-third’ PM.”

“Tax devolutions to States are no special favours being done by men of non-biological origin. They are Constitutional entitlements determined by the finance commission,” Mr. Ramesh said in a post on X.

“This is third-rate PR trying to pass off what is legitimately due to states as some prasad being distributed,” he said.

Currently, 41% of taxes collected by the Centre is devolved in 14 instalments among states during a fiscal year.

With this release, the total amount devolved (for FY 2024-25) to States till June 10, 2024, is ₹2,79,500 crore, it added.