Government Grants Additional Tax Sharing of 81,735 Billion Indian Rupees to State Governments
Union Government Approves Additional Tax Devolution of Rs 81,735 Crore for State Governments
The Ministry of Finance announced on Friday evening that an additional tax devolution of Rs 81,735 crore will be granted to state governments, with the funds expected to be distributed on June 2, 2025. This supplementary devolution is in line with the government's aim to bolster economic growth at the state level and aligns with the principle of cooperative federalism.
This additional instalment of devolution will enable state governments to expedite capital expenditure, thereby financing priority projects and schemes vital for the achievement of the vision of "Viksit Bharat" by 2047, as envisioned by Prime Minister Narendra Modi.
The Ministry further stated that the funds will also be used to address development and welfare-related obligations, thereby enhancing the financial resources available to states for managing such activities more effectively. The early release of these funds is anticipated to boost economic growth at the state level by supporting critical infrastructure projects and development initiatives.
It is worth noting that this additional tax devolution is part of the government's strategy to support states in their pursuit of capital expenditure and development activities. By providing additional liquidity, the government aims to foster economic growth and development in line with its long-term vision for India.
[1] Cooperative federalism is a governance system that promotes closer collaboration between the central and state governments for enhanced economic growth and development at the state level.[2] Capital spending primarily includes investments in infrastructure projects and development initiatives to stimulate economic growth.[3] Priority projects and schemes refers to crucial initiatives that are critical for nationwide development and economic growth.[4] The vision of "Viksit Bharat" by 2047 is a long-term goal set by the government to transform India into a developed and modern nation by the designated year.
[1] The supplementary devolution, in line with cooperative federalism, will empower state governments to strengthen their economic growth in the long term.
[2] To achieve the vision of "Viksit Bharat" by 2047, the early release of funds will aid state governments in financing priority business projects and development schemes deemed critical for the nation.
