Centre releases additional ₹1.09 lakh crore in advance tax devolution to states

The Union government has released an additional ₹1,09,019 crore to state governments as an advance instalment of tax devolution, the Finance Ministry said on August 1.The additional transfer has been made separately from the regular monthly tax devolution scheduled for August 10. According to the ministry, the move is aimed at providing states with greater financial flexibility to accelerate capital expenditure and development-related projects.Uttar Pradesh received the highest allocation among states, with ₹19,208 crore transferred as its share. Bihar received ₹10,845 crore, while Madhya Pradesh was allocated ₹8,010 crore.Other states receiving significant amounts included West Bengal with ₹7,866 crore and Maharashtra with ₹7,022 crore, according to the state-wise details released by the Finance Ministry. Meghalaya To Get ₹9,631 Crore In Tax Devolution For FY 2026-27, Central Support Boosts Infrastructure & DevelopmentSeveral other major states also received substantial allocations. Rajasthan was provided ₹6,460 crore, Odisha received ₹4,819 crore, Andhra Pradesh was allocated ₹4,597 crore, Karnataka received ₹4,504 crore and Tamil Nadu received ₹4,466 crore.Smaller states and Union Territories were also included in the distribution. Sikkim received ₹365 crore, Goa was allocated ₹398 crore and Nagaland received ₹524 crore, among the lower allocations listed.Tax devolution represents the share of central tax revenues transferred by the Union government to states based on the formula recommended by the Finance Commission. These transfers form an important source of revenue for state governments and support spending on infrastructure, development programmes and welfare initiatives.Upcoming Union Budget To Incorporate 16th Finance Commission Recommendations For Tax Devolution From 2026-27 To 2030-31 The additional release is expected to help states strengthen their expenditure capacity, particularly for capital projects that require significant funding. State governments often depend on tax devolution payments to manage budgetary requirements and maintain development momentum.The Finance Ministry clarified that the regular monthly tax devolution instalment for August, scheduled for release on August 10, will be transferred separately according to the established schedule.The latest release comes as the Centre continues its periodic transfers to states under the tax-sharing mechanism, ensuring that state governments have adequate resources for planned expenditure and public investment.

The advance transfer gives states additional fiscal resources ahead of the scheduled monthly devolution to support spending and development programmes.