Centre to release Rs 47,541 crore to states as advance instalment of tax

Union Finance Minister Nirmala Sitharaman has authorised the release of an advance instalment of tax devolution to State Governments amounting to Rs 47,541 crore, the Finance Ministry said on Thursday.

"This is in addition to the regular devolution for the month of January 2022, also being released today," the ministry said in a statement.

Thus, States would receive a total of Rs 95,082 crore or double their respective entitlement during the month of January 2022.

The Government of India had released the first advance instalment of tax devolution amounting to Rs 47,541 crore to States on 22 November 2021.

"With the release of the second advance instalment today, the States would have received an additional amount of Rs 90,082 crore under tax devolution over and above what has been budgeted to be released till January 2022," the Finance Ministry said.

"It also needs to be noted that release from Government of India of the back-to-back loan amounting to Rs 1.59 lakh crore to State Governments in lieu of GST Compensation shortfall in FY 2021-22 was completed by the end of October 2021," it added.

The Centre has released advance payments to the states as part of its commitment to strengthen the hands of States to accelerate their capital and developmental expenditure to ameliorate the deleterious effects of COVID-19 pandemic.