Centre releases extra Rs 1.09 lakh crore tax share to states ahead of festivals, UP gets most

With the festival season at hand, the Centre has released an advance instalment of the states' share in taxes, amounting to Rs 1,09,019 crore. Uttar Pradesh and Bihar have received the largest shares of the amount.

In a statement, the Finance Ministry said the additional instalment of the tax share had been released in view of the coming festivals. According to the ministry, the aim is to let states speed up their capital expenditure and raise funds for development and welfare spending.

The Centre collects money from across the country as GST, income tax and corporate tax, and distributes a fixed share of it among all states. That share is currently 41%. The amount is usually paid in monthly instalments.

This instalment is in addition to the regular monthly one. It does not replace the normal instalment but is an extra sum on top of it, which means states are getting double assistance in November.

The Centre released the additional Rs 1,09,019 crore on the night of October 31, 2026. As it was released on the last day of October, it will reach state treasuries in early November. The regular monthly share is due by mid-November and will also be paid on time. The arrangement is meant to enable state governments to step up capital expenditure and to pay their employees' salaries or bonuses on time.

According to figures released by the Finance Ministry, Uttar Pradesh received the most in this special advance instalment and Sikkim the least. Uttar Pradesh's share is Rs 19,208 crore, about 17.6% of the total.

Sikkim, a north-eastern state with a small population and a small geographical area, received the least, at Rs 365 crore. Maharashtra received Rs 7,022 crore in this instalment.

Bihar, along with Uttar Pradesh, has also been given one of the largest shares in the distribution. Cash flow in the market rises considerably during the festival days anyway, and the money is seen as important for the states. It will allow them to push ahead with development projects and speed up welfare schemes.