In a significant early fiscal transfer aimed at supporting state spending, the Union government on Saturday (August 1) released an additional Rs 1,09,019 crore as tax devolution to state governments, advancing the due monthly instalment.

The Centre said the move is meant to strengthen state finances and give governments more room to push capital expenditure, developmental works and public welfare spending at a time when project execution and infrastructure demand remain high.

According to the Finance Ministry, the release is “in addition to the normal monthly devolution to be released on August 10, 2026.” The ministry said, “This release is in line with the commitment of Government of India to strengthen the finances of States to accelerate their capital and developmental expenditure,” underscoring the Centre’s view that early transfers can help states avoid cash-flow pressures and speed up spending decisions.Tax devolution is the constitutionally mandated sharing of the Centre’s divisible tax pool with states, based on the Finance Commission’s recommendations, and it remains one of the most important untied revenue sources for state governments. The Finance Ministry said such transfers support infrastructure, social welfare and other development programmes, while an advance release improves liquidity and reduces dependence on short-term borrowing.

State-wise allocations

In the August 2026 state-wise distribution, Uttar Pradesh received the highest allocation at Rs 19,208 crore, followed by Bihar at Rs 10,845 crore, Madhya Pradesh at Rs 8,010 crore, West Bengal at Rs 7,866 crore and Maharashtra at Rs 7,022 crore.

Other major recipients included Rajasthan at Rs 6,460 crore, Odisha at Rs 4,819 crore, Andhra Pradesh at Rs 4,597 crore, Karnataka at Rs 4,504 crore, Tamil Nadu at Rs 4,466 crore, Gujarat at Rs 4,094 crore and Jharkhand at Rs 3,660 crore.

The remaining states also received meaningful shares in the advance transfer. Chhattisgarh was allotted Rs 3,602 crore, Assam Rs 3,552 crore, Kerala Rs 2,597 crore, Telangana Rs 2,370 crore and Punjab Rs 2,176 crore. Haryana received Rs 1,484 crore, Arunachal Pradesh Rs 1,476 crore and Uttarakhand Rs 1,244 crore.

UP CM thanks PM Modi, FM Sitharaman for Rs 19,208 cr

Uttar Pradesh Chief Minister Yogi Adityanath posted on X and said, “I express my heartfelt gratitude to Prime Minister Narendra Modi and Union Finance Minister Nirmala Sitharaman for the advance release of Rs 19,208 crore in tax devolution to Uttar Pradesh. This timely support reflects the true spirit of cooperative federalism, strengthens the state’s fiscal capacity and will accelerate development projects, infrastructure creation and public welfare initiatives. Together, we remain committed to building a stronger, more prosperous and self-reliant Uttar Pradesh.”