Centre Releases Rs 1.09 Lakh Crore Advance Tax Devolution to States
UPSC / SSC current affairs note · Polity
Why in news
The Union Government released an advance tax devolution of Rs 1,09,019 crore to states on August 1, ahead of the scheduled transfer on August 10. This move aims to strengthen state finances and accelerate capital and developmental expenditure, providing states with timely funds for their projects.
Background
Tax devolution is the sharing of Union tax revenues with states as per the recommendations of the Finance Commission. The Centre typically releases monthly installments to states. Advance releases are made to help states manage their cash flows and boost spending.
Key facts
The Union Government released an advance tax devolution of Rs 1,09,019 crore to states on August 1.
This is in addition to the normal monthly transfer.
The advance release is ahead of the scheduled August 10 transfer.
The move aims to strengthen state finances and accelerate capital and developmental expenditure.
Uttar Pradesh is the top recipient of this advance tax devolution.
Prelims pointers
- Tax devolution: Sharing of Union tax revenues with states as per Finance Commission recommendations.
- Finance Commission: Constitutional body (Article 280) that recommends tax devolution.
- Advance tax devolution: Early release of funds to states to help manage cash flows.
- Uttar Pradesh: Top recipient in this release.
Mains angles
- Discuss the significance of advance tax devolution in Centre-State financial relations.
- Examine the role of Finance Commission in determining tax devolution and its impact on state finances.