Why in News?
The Union Finance Ministry released an additional ₹1,09,019 crore as tax devolution to State governments, over and above the regular monthly instalment.
What is tax devolution?
- Tax devolution is the share of the Centre's divisible pool of taxes that is transferred to the States.
- The current devolution share is 41% of the divisible pool, based on the recommendation of the 15th Finance Commission.
- The additional release gives States more funds for development and other expenditure without waiting for the normal monthly instalment.
Exam Connect
- Finance Commission → constitutional body under Article 280
- 15th Finance Commission → recommended 41% vertical devolution to States