Centre releases Rs 37,420 cr to states

The Centre has released Rs 37,420 crore to the states for 2015-16 as the first instalment of devolution as recommended by the 14th Finance Commission (FFC).

FFC had recommended the Centre transfer 42 per cent from the divisible tax pool to states for a period of five years, starting from the current financial year (FY16). Besides, 5.72 per cent of the divisible pool would be transferred as grants. Then there would be other transfers at 15.72 per cent.

Under this devolution, the Centre is to transfer Rs 8.43 lakh crore to states and Union territories. Of this, Rs 5.24 lakh crore would be transferred from Union taxes in the current financial year.