The August 1 release is in addition to the regular monthly devolution due on August 10, giving states an early fiscal boost as they step up capital expenditure and roll out public programmes.
“The release is in line with the government of India’s commitment to strengthen the finances of states to accelerate their capital and developmental expenditure,” the finance ministry said.
Uttar Pradesh received the highest allocation at ₹19,208 crore, followed by Bihar (₹10,845 crore), Madhya Pradesh (₹8,010 crore), West Bengal (₹7,866 crore) and Maharashtra (₹7,022 crore). Rajasthan was allotted ₹6,460 crore, while Odisha, Andhra Pradesh, Karnataka and Tamil Nadu received between ₹4,400 crore and ₹4,800 crore each.
Tax devolution is the largest source of untied transfers from the Centre to states and finances both capital and revenue expenditure.
An advance release improves liquidity, reduces reliance on short-term borrowing and enables states to accelerate project execution without waiting for the scheduled monthly transfer.