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Center releases Rs 1.39 crore for states towards tax decentralization by June

In an effort to boost economic development in states, the Ministry of Finance has released an additional portion of tax transfers to states by June 2024. The total amount released to states for June now stands at Rs 139,750 crore. This decision was taken to expedite the development projects of various states so that their projects would not be postponed due to the capital requirement.

The Finance Ministry’s decision to release the tax decentralization was taken after a high-level meeting with the Finance Minister and the Economy Minister on Monday.

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The meeting thoroughly assessed the economic and fiscal conditions of the states, leading to the conclusion that an additional tranche of funds would be necessary.

Most of the fund went to Uttar Pradesh for Rs 25,069.88 crore, followed by Bihar for Rs 14,056.12 crore, Madhya Pradesh got Rs 10,970.44 crore and West Bengal transferred Rs 10,513.46 crore.

The additional tranche of funds is part of a broader fiscal strategy outlined in the interim budget for 2024-25, in which Rs 12,19,783 crore has been allocated for transfer of taxes to states.

With the additional funds being released this month, the cumulative amount transferred to the states as of June 10 for the fiscal year 2024-25 has reached Rs 279,500 crore.

This disbursement underlines the central government’s focus on maintaining a steady flow of financial resources to states, providing them with the resources to undertake critical development initiatives.

State governments will benefit from this enhanced financial support, allowing them to accelerate their capital expenditures, including critical infrastructure projects such as road construction, public utilities and other development initiatives.

The Ministry of Finance has provided a detailed breakdown of the funds released to ensure that each state gets its fair share to meet its specific development needs.

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As India continues to navigate the complexities of global economic dynamics, the central government’s focus on providing financial support to states is critical to supporting growth and promoting the country’s development.