The Central Government released Rs. 1,09,019 crore in advance tax devolution to state governments ahead of Diwali 2026, helping states accelerate capital expenditure, development projects and welfare programmes. Uttar Pradesh received the largest share, followed by Bihar and Madhya Pradesh.
The Central Government on Thursday released an advance instalment of tax devolution worth Rs. 1,09,019 crore to state governments ahead of Diwali, enabling states to accelerate capital expenditure and meet development and welfare-related financial requirements during the festive season.
According to the Union Finance Ministry, the regular monthly instalment was released earlier than its scheduled date of November 10, considering the upcoming festive season and the need to strengthen the financial position of states.
In an official statement, the Finance Ministry said the advance release would help state governments speed up capital spending and finance development and welfare-related expenditure. The move is also expected to provide additional financial flexibility to states for implementing infrastructure projects and public welfare initiatives.
Among the states, Uttar Pradesh received the largest allocation of Rs. 19,208 crore. Bihar was provided Rs. 10,845 crore, while Madhya Pradesh received Rs. 8,010 crore. West Bengal was allocated Rs. 7,866 crore, Maharashtra received Rs. 7,022 crore and Rajasthan received Rs. 6,460 crore.
The latest release comes after the Centre released another additional instalment of tax devolution worth Rs. 1,09,019 crore to states last week, over and above the regular monthly transfer. The additional allocation was also aimed at supporting state finances during the festive season and enabling governments to increase capital expenditure and meet development commitments.
Earlier, in August, the Union Government had released an additional instalment of Rs. 1,09,019 crore to state governments beyond the normal monthly devolution. These additional transfers reflect the Centre’s efforts to provide financial support to states and strengthen their capacity to undertake infrastructure development and welfare programmes.
Tax devolution is an important component of fiscal relations between the Union Government and state governments. It allows states to receive their share of central tax revenues and utilise the funds according to their development priorities and financial requirements.
The advance release is expected to benefit states by providing additional liquidity for ongoing infrastructure projects, public services, development programmes and welfare-related expenditure. It also gives state administrations greater flexibility in managing their financial commitments during a period of increased spending.
Meanwhile, official figures for the first six months of the current financial year 2026-27 indicate that India’s fiscal deficit reached Rs. 7.14 lakh crore between April and September. This represents 42.1 per cent of the government’s full-year budget estimate.
The Union Government has projected a fiscal deficit of Rs. 16.96 lakh crore for the entire financial year 2026-27.
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Revenue receipts during the April-September period stood at Rs. 17.57 lakh crore, accounting for 49.7 per cent of the annual budget estimate. Of the total revenue receipts, net tax revenue amounted to Rs. 12.76 lakh crore, while non-tax revenue stood at Rs. 4.81 lakh crore.
The advance tax devolution highlights the Centre’s continued financial support to state governments, particularly during the festive period, while providing resources to sustain development activities, infrastructure investment and welfare initiatives across the country.
