Tax devolution to States

Subject – Economy

Context – Capex push: Tax devolution to states front-loaded

Concept –

Typically, the tax devolution to states is done in 14 instalments in a year and the adjustments as per the revised estimate are usually done in March.
Union finance minister Nirmala Sitharaman said the tax devolution to states would be front-loaded to enable them to increase the pace of capital spending. On November 22, an amount of Rs 95,082 crore would be released to states, instead of half that amount which is due as per the Budget.
To improve the liquidity of states, the Centre has already released the entire back-to-back loan component of Rs 1.59 lakh crore to the states in lieu of shortfall in release of GST compensation during the current fiscal.
This was in addition to the compensation released to the states from the designated cess kitty of Rs 60,000 crore.

To know about Capex, kindly refer September 2021 DPN.