Centre Disburses ₹1.09 Lakh Crore to States for Financial Support

The Finance Ministry announced on Saturday, August 1, 2026, that the Centre has released an additional instalment of tax devolution to state governments, amounting to ₹1.09 lakh crore. This disbursement comes ahead of the regular monthly instalment scheduled for August 10, providing states with crucial financial support.

In a statement, the Ministry said, "The Union government has released an additional instalment of tax devolution to state governments amounting to ₹1,09,019 crore on 1st August 2026, which is in addition to the normal monthly devolution." This move is expected to help states meet their financial requirements and expedite developmental projects.

Under the current tax devolution framework, 41% of the taxes collected by the Centre are distributed among states in 14 instalments during a fiscal year. The additional instalment is seen as a proactive step by the government to ensure states have access to funds without delay, especially as they deal with various economic challenges.

This financial support comes at a time when states are grappling with increased expenditure demands and the need to boost infrastructure and welfare schemes. The early release of funds is likely to provide states with greater flexibility in managing their budgets and implementing key programs.

The Centre’s decision highlights its commitment to cooperative federalism, ensuring that states have the resources needed for balanced growth and development across the country. With this additional allocation, states are expected to ramp up spending on critical sectors, potentially spurring economic activity at the grassroots level.