Centre Boosts State Finances with Additional Tax Devolution Ahead of Festival Season

In a strategic move to support state governments ahead of the festive season, the Centre has announced an additional tax devolution of Rs 1,01,603 crore. The infusion of funds aims to facilitate increased capital spending and support ongoing welfare initiatives at the state level.

According to a statement released by the finance ministry on Wednesday, this additional financial boost is set to be distributed on October 1, 2025. The move is part of the Centre's broader goal to foster cooperative federalism and achieve 'Viksit Bharat' by 2047.

This additional allocation comes ahead of the regular monthly devolution of Rs 81,735 crore, scheduled for release on October 10, 2025, representing 41% of the taxes collected by the Centre. The aim is to provide states with ample resources to address fiscal needs during the upcoming festival season.

(With inputs from agencies.)