News Highlight
The Centre released funds over 1.16 lakh crore to the States to help state governments’ capital spending abilities in this financial year.
Key Takeaways
- The Centre released funds is in line with the commitment of the government of India to strengthen the states to accelerate their capital and developmental expenditure.
- Uttar Pradesh received the highest allotment of the total amount, followed by Bihar.
- The disbursal comes after chief ministers at the NITI Aayog meeting raised concerns about decreasing resources.
- Some states demanded that the goods and service tax compensation be extended on account of the Covid-19 pandemic.
Central tax devolution to the states.
- Finance Commission:
- The Finance Commission is a constitutional body to give suggestions on centre-state financial relations.
- Under the 15th Finance Commission, the share of states in the central taxes for the 2021-26 period is recommended to be 41%.
- This is less than the 42% share recommended by the 14th Finance Commission for the 2015-20 period.
- Criteria for devolution:
| Criteria | 15th Finance Commission-2021-26 |
| Income Distance | 45. Percentage |
| Area | 15. Percentage |
| Population (2011) | 15. Percentage |
| Demographic Performance | 12.5 Percentage |
| Forestry and Ecology | 10. Percentage |
| Tax and fiscal efforts. | 2.5 Percentage |
| Total | 100 Percentage |
Pic Courtesy: The Hindu
Content Source: The Hindu