(MENAFN- Live Mint) New Delhi: The Union government released ₹1.78 trillion to states in October in tax devolution, which includes an advance instalment of ₹89,086.50 crore, the finance Ministry said on Thursday.
Tax devolution proceeds to the states are released every month.
However, the advanced instalment was released in view of the festive season, which will enable states to accelerate capital spending and finance their development and welfare expenditure, it added.
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Among the states, Uttar Pradesh received the highest amount at ₹31,962 crore, followed by Bihar ( ₹17,921 crore), Madhya Pradesh ( ₹13,987 crore), West Bengal ( ₹13,404 crore), Maharashtra ( ₹ 11,255 crore), Rajasthan ( ₹10,737 crore), Odisha ( ₹8,068 crore), Tamil Nadu ( ₹7,268 crore), Andhra Pradesh ( ₹7,211 crore), Karnataka ( ₹6,498 crore), Gujarat ( ₹6,197 crore).
Goa, Sikkim and Mizoram received the least among the lot at ₹688 crore, ₹691 crore and ₹891 crore, respectively.
Moderate GDP growth
To be sure, India's GDP growth moderated to 6.7% year-on-year in the April-June quarter, down from 7.8% in the previous quarter, according to data released by the statistics ministry in August.
In FY24, India reported quarterly GDP growth rates of 8.2%, 8.1%, 8.6%, and 7.8%, and an annual growth rate of 8.2%.
The slowdown in economic growth during the April-June quarter was attributed to the slowdown in the central government's capital expenditure due to the general elections.
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However, India's economic growth is slated to pick up in the subsequent quarters on the back of higher public spending stimulating investment, the finance ministry's Economic Review for August said, adding rural incomes and demand are expected to get stronger, and food inflation will be milder in the coming months in the absence of any serious climate shocks.
Last month, finance minister Nirmala Sitharaman said that India's economic growth, which slowed down during Q1, FY25, gained momentum subsequently with a pickup in government spending.
"Because of elections, the capital expenditure plans announced didn't find much expenditure happening in Q1, because every department was looking at the post-election time. As a result, a large part of the influence or impact that could have been had with public expenditure was muted," she said.
"However, subsequently, during Q2 and Q3 (FY25), expenditure is picking up, which will trigger the slow down to move faster," she added.
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