Tax Devolution
Centre devolved INR 8.12 tln to states as share in taxes so far FY25, says source
This story was originally published at 20:47 IST on 11 November 2024
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By Krity Ambey and Sagar Sen
NEW DELHI – The Centre has devolved INR 8.12 trillion to states as a share in taxes so far in the current fiscal year, a finance ministry official said. This is about 65% of the devolution estimate for 2024-25 (Apr-Mar) as given in the Budget for the year, the official said.
The Budget for FY25 has projected tax devolution to states at INR 12.47 trillion compared with INR 11.29 trillion devolved in FY24. Till September, the Centre devolved INR 5.45 trillion to states as their share in taxes, as per the latest data available with the Controller General of Accounts. The government in October said it devolved INR 1.78 trillion to states as their share for the month, including an additional instalment of INR 890.87 billion.
The devolution of INR 8.12 trillion so far has been significantly high, the official said. In FY24, the Centre had devolved only INR 6.01 trillion till November. The higher devolution is one of the reasons why the states have borrowed only around INR 5 trillion, as against INR 8 trillion they have indicated to borrow till December, the official added.
The 15th Finance Commission has recommended sharing 41% of central taxes with states. Typically, the devolution is released to states in 14 equal tranches. End
Edited by Saji George Titus
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