Team Blitz India
THIRUVANANTHAPURAM: Amid the financial crisis and opposition’s criticism, the Kerala Government has received Rs 1,404.50 crores from the Central Government as tax devolution ahead of festivities. The Centre has authorised release of tax devolution of Rs 72,961.21 crore to strengthen the state for financing various social welfare measures and infrastructure development schemes, an official release from Finance Ministry said.
This fund is in addition to the tax devolution instalment due to the states on January 10, 2024, and the instalment of Rs 72,961.21 already released on December 11, 2023, reads the press release.
Among the 28 states, Uttar Pradesh received the highest amount of Rs 13,088.51 crore as tax devolution while Goa, the smallest state in the country received Rs 281.63 crore. Currently, 41 per cent of taxes collected by the Centre is shared in 14 instalments among states during a fiscal year. The tax devolution is being administered by the recommendations of the erstwhile 15th Finance Commission chaired by NK Singh.
Tax devolution, a key source of funding for state Governments, involves the Centre distributing about 41 percent of its tax collections to states annually for development, welfare and priority sector projects and schemes.
As per the 2023-24 Budget, the Centre expects to transfer Rs 10.21 lakh crore to states this year. So, the size of each of the 14 instalments should be Rs 72,961 crore. However, the size of the transfers can increase as the year progresses once the Centre’s revenues improve. This has already happened in 2023-24, with the amount of monthly transfers in the first quarter standing at Rs 59,140 crore.
Against its budget estimate of Rs 10.21 lakh crore, the Union Government has transferred Rs 7.47 lakh crore in the first nine months of the financial year. As such, this leaves Rs 2.74 lakh crore to be transferred to states in January-March 2024 for the budget estimate to be met, or Rs 91,386 crore per month.
In its statement on December 22, the finance ministry said it will transfer another instalment on January 10, 2024, to states. It, however, did not specify what would be the size of that instalment.
