In view of the slowdown in capital expenditure by states, the Centre has released two instalments of tax devolution totaling Rs 1,78,173 crore to state governments on Thursday as against the normal monthly devolution of Rs 89,086.5 crore.
“This release is in view of the upcoming festive season and to enable states to accelerate capital spending, and also finance their development/welfare-related expenditure,” the finance ministry said in a statement.
Among the large states, Uttar Pradesh got 31,962 crore, followed by Bihar (Rs 17,921 crore), Madhya Pradesh (Rs 13,987 crore), West Bengal (Rs 13,404) and Maharashtra (Rs 11,255 crore).
This was the second time so far in the current financial year that the Centre has released an advance monthly instalment. In June, the Centre had frontloaded tax devolution to states by deciding to release two monthly instalments amounting to Rs 1,39,750 crore.
States’ capital expenditure likely fell by 17% on-year in the first four months of the current financial year, prolonging the moderation across the public sector capex space.