The Central government today authorised the release of tax devolution to the tune of Rs 72,961.21 crore to 28 states for the month of November just ahead of the festive season.
This will enable the state governments to make in-time releases and add to the festivities and celebrations among the people, the Finance Ministry said.
Of the total amount of Rs 72,961.21 crore, the tax devolution released to Meghalaya was Rs 559.61 crore.
Among the North East states, Assam got the highest share at Rs 2282.24 crore followed by Arunachal Pradesh at Rs 1281.93 crore.
Tripura got Rs 516.56 crore, Manipur Rs 522.41 crore, Nagaland Rs 415.15 crore, Mizoram Rs 364.8 crore and Sikkim Rs 283.1 crore.
The highest share of tax devolution was released to Uttar Pradesh at Rs 13,088.51 crore. Bihar came second with Rs 7338.44 crore followed by Madhya Pradesh with Rs 5727.44 crore. West Bengal and Maharashtra got Rs 4608.96 crore respectively.
Tax devolution refers to the distribution of tax revenues between the central government and the state governments. It is a constitutional mechanism established to allocate the proceeds of certain taxes among the Union and the states in a fair and equitable manner.
Article 280(3)(a) of the Constitution of India mandates that the Finance Commission has the responsibility to make recommendations regarding the division of the net proceeds of taxes between the Union and the states.
The share of states in the central taxes for the 2021-26 period is recommended to be 41 per cent, same as that for 2020-21.
Money released under tax devolution is untied fund and hence states are free to spend the money as per their discretion.
