Finance minister Nirmala Sitharaman on Friday said the Centre will release an extra installment of tax devolution to state governments, to support their capital and development expenditure.
As against the monthly devolution of Rs 58,333 crore, the states, in aggregate, would get Rs1.17 trillion for February.
“I want to ensure that money is in their hands at the time when they need it,” Sitharaman told lawmakers in the Lok Sabha.
The central tax devolution is estimated to exceed FY23BE by Rs .31 trillion to reach Rs 9.48 trillion as per the revised estimate for FY23, due to buoyancy in revenues.
Tax devolution, grants and loans are the main forms of transfer of resources by the Centre to the states. The GoI has estimated tax devolution to rise by 7.7% on-year to `10.2 trillion in the FY24 Budget estimates. The Centre’s increased magnitude of the interest-free capex loan at `1.3 trillion, from `0.76 trillion in FY23 RE, would also augment the resources available to the states for capex next year.