New Delhi: The Union Government has released an additional ₹1,09,019 crore to state governments as an advance instalment of tax devolution on October 31, 2026. The fund transfer, announced by the Ministry of Finance, comes ahead of the festive season and is intended to provide states with additional financial resources to accelerate capital expenditure and meet development and welfare-related spending requirements.
The latest release is over and above the regular monthly tax devolution and marks the second additional instalment of tax devolution during the financial year 2026–27. According to the Ministry of Finance, the advance transfer will help state governments manage their expenditure requirements, speed up infrastructure-related spending and finance development initiatives without waiting for the regular monthly transfer.
Centre Releases Additional ₹1,09,019 Crore to 28 States
The additional tax devolution covers 28 states, with allocations determined according to the applicable tax-sharing framework. Among the states, Uttar Pradesh received the highest allocation of ₹19,208 crore, followed by Bihar with ₹10,845 crore and Madhya Pradesh with ₹8,010 crore. Other major recipients include West Bengal, which received ₹7,866 crore, Maharashtra with ₹7,022 crore and Rajasthan with ₹6,460 crore.
The release is particularly relevant ahead of the festive season, when state governments may face increased expenditure requirements for public services, infrastructure development and welfare programmes.The Ministry stated that the additional amount would support states in accelerating capital spending while financing their development and welfare-related expenditure.
State-Wise Distribution of ₹1,09,019 Crore Tax Devolution
The Ministry of Finance has published the following state-wise allocation of the additional tax devolution released on October 31, 2026.
| S. No. | State | Amount (₹ crore) |
|---|---|---|
| 1 | Andhra Pradesh | 4,597 |
| 2 | Arunachal Pradesh | 1,476 |
| 3 | Assam | 3,552 |
| 4 | Bihar | 10,845 |
| 5 | Chhattisgarh | 3,602 |
| 6 | Goa | 398 |
| 7 | Gujarat | 4,094 |
| 8 | Haryana | 1,484 |
| 9 | Himachal Pradesh | 996 |
| 10 | Jharkhand | 3,660 |
| 11 | Karnataka | 4,504 |
| 12 | Keralam | 2,597 |
| 13 | Madhya Pradesh | 8,010 |
| 14 | Maharashtra | 7,022 |
| 15 | Manipur | 682 |
| 16 | Meghalaya | 688 |
| 17 | Mizoram | 615 |
| 18 | Nagaland | 524 |
| 19 | Odisha | 4,819 |
| 20 | Punjab | 2,176 |
| 21 | Rajasthan | 6,460 |
| 22 | Sikkim | 365 |
| 23 | Tamil Nadu | 4,466 |
| 24 | Telangana | 2,370 |
| 25 | Tripura | 699 |
| 26 | Uttar Pradesh | 19,208 |
| 27 | Uttarakhand | 1,244 |
| 28 | West Bengal | 7,866 |
| Total | 1,09,019 |
Why Has the Centre Released an Additional Tax Devolution Instalment?
The additional transfer has been made with two primary objectives: supporting state expenditure ahead of the festive season and enabling governments to accelerate capital investment and development-related activities. Capital expenditure generally involves spending on long-term assets such as roads, bridges, public infrastructure, transport facilities and other development projects. Such investments can improve public infrastructure and support economic activity.
The additional funds can also provide state governments with greater flexibility to finance welfare-related expenditure, including programmes and public services that require regular financial support. Unlike a separate project-specific grant, tax devolution provides states with their constitutionally determined share of the divisible pool of central taxes. This allows state governments to plan expenditure according to their respective priorities.
Second Additional Tax Devolution Instalment in FY 2026–27
The October 31 announcement marks the second additional tax devolution instalment released during the current financial year. Earlier, on August 1, 2026, the Union Government had also released an additional ₹1,09,019 crore to state governments to support capital and developmental expenditure.
The latest announcement extends this additional financial support, with the October release specifically highlighting the upcoming festive season and the need to facilitate development and welfare-related spending. The additional instalments are separate from the regular monthly tax devolution transfers made to state governments.
What Does the Additional Fund Release Mean for State Governments?
The additional transfer provides state governments with financial resources that can be directed towards their expenditure priorities. States can use the available funds to support infrastructure projects, strengthen public services, finance development programmes and meet welfare-related expenditure requirements. The timing of the release also gives state administrations additional financial flexibility ahead of the festive season, when expenditure on public facilities and administrative arrangements may increase.
However, the actual impact of the transfer will depend on how individual state governments allocate and utilise the funds. The announcement itself does not specify separate spending plans or project-wise utilisation targets for the amount released to each state. The October 31 release therefore represents an additional fiscal transfer from the Union Government to state governments, aimed at supporting public investment and expenditure requirements during FY 2026–27.
