The Centre will release Rs 95,082 crore as tax devolution to the states this month after including one advance instalment to help them push their capital expenditure, Finance Minister Nirmala Sitharaman said on Monday.
After a meeting with all chief ministers and state finance ministers, Sitharaman said states had said that it would be helpful for them if the tax devolution is front loaded.
\
“I have suggested the Finance Secretary that on November 22 instead of normal Rs 47,541 crore, the states be given one more instalment. So Rs 95,082 crore will be given to states on November 22,” Sitharaman told reporters here.
So, with this, states will have more money in their hands so that they can consider spending it for infrastructure creation, she added.
Currently, 41 per cent of tax collected is devolved in 14 instalments and states have a predictability of their cash flows, Finance Secretary T V Somanathan said.
This is an advance release, and any adjustments will be made in March, he added.
As many as 15 chief ministers, J&K LG and Deputy chief ministers of three states participated in the meeting. Rest of the states were represented by finance ministers.
The Context of the meeting was after 2nd Covid wave we’re seeing robust growth. However it’s also the time we’re looking at ways to sustain growth and take it to double digits, Sitharaman said.
This meeting was essentially to seek ideas from states because in most of the issues related to investment development, and also for manufacturing and business activities, come in states domain, she added.