While Uttar Pradesh alone received 17.9 percent of the total funds released, South Indian states accounted for 15.8 percent.
Published Oct 10, 2024 | 3:49 PM ⚊ Updated Oct 10, 2024 | 3:49 PM
Indian money. (iStock)
The Union government on Thursday, 10 October, released tax devolution —share in the divisible pool of Central Taxes and duties — of ₹1,78,173 crore to state governments, including one advance instalment of ₹89,086.50 crore in addition to regular instalment due in October 2024.
A release from the Ministry of Finance said the advance instalment was released in view of the upcoming festive season and to enable states to accelerate capital spending and finance their development and welfare-related expenditures.
The release of funds witnessed Uttar Pradesh receiving more tax devolution than all the five Southern states combined.
This move comes amidst most South Indian states, including Karnataka, Kerala and Tamil Nadu, alleging that the states were not receiving the tax devolution they deserved.
Among the states, Uttar Pradesh received the highest payment of 31,962 crore while Goa received the lowest at 688 crore.
South Indian states Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana received 7,211 crore, 6,498 crore, 3,430 crore, 7,268 crore and 3,745 crore respectively.
While Uttar Pradesh alone received 17.9 percent of the total funds released, South Indian states accounted for 15.8 percent.
Meanwhile, Andhra Pradesh unit of the BJP expressed gratitude towards Prime Minister Narendra Modi for releasing the funds.
“BJP Andhra Pradesh thanks Prime Minister Shri@narendramodi for early release of current and next installment funds of tax devolution (Rs. 7211 Crores) in support of implementation of state capital and welfare programmes,” it said on X.
రాష్ట్ర మూలధన మరియు సంక్షేమ కార్యక్రమాల అమలకు తోడ్పాటునందిస్తూ, ట్యాక్స్ డెవల్యూషన్ ప్రస్తుత మరియు తర్వాతి ఇన్స్టాల్మెంట్ నిధులు (రూ. 7211 కోట్లు) పండగల సమయంలో ముందుగానే విడుదల చేసినందుకు ప్రధానమంత్రి శ్రీ @narendramodi గారికి బిజెపి ఆంధ్రప్రదేశ్ కృతజ్ఞతలు తెలుపుతుంది… https://t.co/d7oYGgvnOv
— BJP ANDHRA PRADESH (@BJP4Andhra) October 10, 2024
Meanwhile, Bihar received 17,921 crore and Madhya Pradesh, West Bengal, Maharashtra, and Rajasthan recieved 13,987 crore, 13,404 crore, 11,255 crore, and 10,737 crore respectively.
On 12 September, Kerala hosted a conclave demanding a more equitable approach to federalism, emphasising the urgent need for a recalibration of the fiscal relationship between the Union and the states.
It was attended by finance ministers, secretaries, and renowned economists from Tamil Nadu, Karnataka, Telangana, and Punjab.
As the 16th Finance Commission gears up for its recommendations, the ministers laid out a roadmap for what they see as a necessary reformation in India’s fiscal federalism.
A significant concern voiced during the conclave was the widening economic disparity between states, a gap exacerbated by skewed resource allocation from the Union government.
The conclave underscored a central issue — India’s current fiscal federalism is at a crossroads. The ministers collectively voiced concerns that without major reforms, the existing system could inhibit both state and national progress. They argued that federal equity is not just about redistribution but about recognising performance, ensuring fairness, and upholding the fiscal autonomy of states.
Amid allegations of fiscal mismanagement by the BJP’s national leadership, data offered by the Union Finance Ministry reveal that the five Southern states registered a consistent upward growth in total revenue and net direct tax collections in the last five fiscal years.
In recent years, the Southern states have emerged as significant contributors to India’s fiscal coffers, showcasing consistent growth trajectories amidst economic fluctuations and challenges.
While the incumbent BJP insists that states have received more funds under the NDA government in comparison to the UPA government, data revealed that states’ contributions towards revenue have also increased multifold year-on-year.
State-wise share from central pool of taxes for fiscal 2024-2025 as per Union interim budget.
Meanwhile, The tax devolution released to five Southern states put together has decreased from 17.98 percent in 2018-19 to 15.75 percent in 2022-23.
The vote-on-account Union Finance Minister Nirmala Sitharaman presented on 1 February, 2024 showed five states, Uttar Pradesh, Bihar, Madhya Pradesh, West Bengal, and Maharashtra, receiving the highest shares from the central pool of taxes and duties.
None of the Southern states figures among the top seven recipients. Tamil Nadu receives the eighth highest share — 4.07 percent — from the central pool of taxes.
The list of the states’ shares divulged that Uttar Pradesh has been receiving an estimated ₹2,18,816.84 crore as its share from the central pool.
The amount is over ₹26,000 crore more than the share of all the five southern states — Karnataka, Tamil Nadu, Telangana, Andhra Pradesh, and Kerala — combined. Together, they receive ₹1,92,725.7 crore. This has been the trend for several years.
(Edited by Muhammed Fazil)
