Finance Minister Nirmala Sitharaman released the advance instalment of tax devolution to state governments amounting to Rs 47,541 crore on Thursday. This is in addition to the regular devolution for the month of January 2022, also being released today.

With the payment on Thursday, states have received a total of Rs 95,082 crore or double their respective entitlement during the month of January 2022. 

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

The second advance instalment to states is part of 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 development comes after FM Sitharaman met representatives of the states to brainstorm ideas to attract foreign investments into the country with various key indicators such as exports, manufacturing PMI, and digital payments reaching the pre-pandemic levels.    

It is to no be noted that states are entitled to 41% of central taxes that is devolved in 14 instalments in a fiscal year. 

The release from the central government 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.

This is in line with the commitment of the central government to strengthen the hands of states to accelerate their capital and developmental expenditure to ameliorate the deleterious effects of the CoVID-19 pandemic said Finance Ministry in a statement