More Tax Money to States to Boost Economy by Spending More

The Union government on Friday, released tax devolution of ₹1,73,030 crore ($20.76 billion) to state governments, as against the devolution of ₹89,086 crore ($10.72 billion) in December 2024.

"A higher amount is being devolved this month to enable states to accelerate capital spending and finance their development and welfare-related expenditures," the Union government said in a statement.

The tax devolution comes ahead of schedule after the government’s first advanced estimates said GDP is likely to grow at a four-year low of 6.4% in FY25, down from 8.25 in FY24.

In terms of state-wise allocation, Uttar Pradesh, Uttarakhand, and Bihar received the biggest share of funds. Uttar Pradesh received ₹31,039.84 crore ($3.74 billion), Bihar ₹17,403.36 crore ($2.08 billion), and Madhya Pradesh ₹13,582.86 crore ($1.63 billion).