The Central government released the 14th Tax devolution to the states. As per the reports 41% of the total tax collected by the centre in the fiscal year is distributed.
The Union Government has released 14th installment of tax devolution to State Governments amounting to ₹1,40,318 crore today, as against normal monthly devolution of ₹70,159 crore, the Finance Ministry made this statement while releasing the same on 10th March 2023 (Friday).
This is in line with the commitment of the Government of India to strengthen the hands of States to accelerate their capital and developmental expenditure.
The Union government does not have discretion over the devolution of resources to the states. It is based on the Finance Commission’s formulaic allocation of funds to the states. The need, equity, and efficiency tenets serve as the foundation for the tax devolution formula. To put it another way, the system is progressive, giving more money to the states that require it most.
The state of Sikkim received the least of them, ₹545 crore, and the state of Uttar Pradesh received the highest, ₹24783 crore. While reading the formulaic principle with the amount allocated, the state of Uttar Pradesh needed more financial resources.
According to Article 280 (3) (a) of the Indian Constitution, the Finance Commission has the critical responsibility of recommending how to divide the net profits of taxes between the Union and the states. And the tax devolution is the result of such provision.
Being the primary means by which resources are transferred from the Center to States, the share of States in the Net Proceeds of Union Taxes, this is the most pivotal responsibility of any Finance Commission.
As per the release, the State of Andhra Pradesh got 5474 Cr, Bihar 14232, Gujarat 4827, Kerala 2705, Karnataka 5125, Maharashtra 8954, Odisha 6399, Punjab 2561, West Bengal 10642..etc. To know the fund allocated to your state click here.
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