Govt releases extra ₹1.09-trillion tax devolution tranche to states in Oct | Economy & Policy News

The central government on Saturday released an additional instalment of ₹1.09 trillion as tax devolution to states in October, the finance ministry said.

“This is the second additional instalment in this financial year,” the finance ministry said in a press release. “This release is in view of the upcoming festive season and to enable states to accelerate capital spending, and also to finance their development/welfare-related expenditure,” the release added.

The government had last released an extra tranche in August.

The government’s cumulative tax devolution to states in the first half of 2026-27 (FY27) was nearly ₹7 trillion, according to the latest data available with the Controller General of Accounts (CGA).

The central government usually releases funds as tax devolution to states in 14 instalments a year and uses its own discretion to pick the months for double devolution.

According to the Sixteenth Finance Commission’s recommendation, the Centre releases 41 per cent of the divisible pool of central taxes to states.