Centre Doubles Tax Devolution To States, Rs 7,834.80 Cr Allocated To Odisha

Bhubaneswar: The Centre on Friday released Rs 7,834.80 crore to Odisha as its share due to the tax devolution ahead of schedule.

Expressing gratitude to Prime Minister Narendra Modi and Union Finance Minister Nirmala Sitharaman, Chief Minister Mohan Majhi described the release of the advance installment of Rs 1,73,030 crore as tax devolution to state governments, including Rs 7,834.80 crore allocated for Odisha, as timely support that would bolster development initiatives and empower states to serve the people better.

The tax devolution of Rs 1,73,030 crore to state governments in January 2025 is nearly double the amount from Rs 89,086 crore in December 2024.

While announcing the state-wise distribution of net proceeds of Union Taxes and Duties for January, 2025, the Centre said that a higher amount was being devolved this month to enable states to accelerate capital spending and finance their development and welfare-related expenditures.

Tax devolution refers to the distribution of tax revenues between the Centre and states. Money from the divisible tax pool is devolved to states in 14 annual instalments: 11 in 11 months and three in March.

Uttar Pradesh received the highest amount of Rs 31,039.84 crore, followed by Bihar (Rs 17,403.36 crore), Madhya Pradesh (Rs 13582.86), West Bengal (Rs 13017.06 crore) and Maharashtra (Rs 10930.31)

The final report of the 15th Finance Commission had recommended the transfer of 41 per cent to the states after Jammu and Kashmir was carved out into two union territories. Prior to this, the 14th Finance Commission had recommended the devolution of 42 per cent of central taxes to states. The states’ share, however, can be lower due to cess and surcharge imposed by the Centre, which are not shared with states, the Business Standard reported.