THIRUVANANTHAPURAM: In a brief respite for cash-strapped Kerala, the central government on Friday released Rs 1,404.50 crore as an additional instalment of tax devolution. The Centre released a total of Rs 72,961.21 crore for 28 states.
An official release from the Union finance department said the sanction was given for forthcoming festivities and New Year. It will strengthen the hands of state governments for financing various social welfare measures and infrastructure development schemes, it added. The latest sanction is in addition to the devolution instalment that was released on December 11, and that which is due to states on January 10, 2024.
The state-wise break-up showed that Uttar Pradesh received the highest amount, Rs 13,088.51 crore, followed by Bihar (Rs 7,338.44 crore) and Madhya Pradesh (Rs 5,727.44 crore).
Last week, the Central Department of Expenditure (DoE) extended the timeline for adjusting the off-budget borrowing (OBB) of states. Based on this, the Centre will not adjust about Rs 3,000 crore from the net borrowing ceiling (NBC) for Kerala on OBBs in the current financial year. This additional borrowing space was a relief for the state government, which has availed almost all of the NBC sanctioned until the third quarter of this year.
However, this amount will be adjusted in two halves in the next two years. The state had earlier approached the Supreme Court seeking a settlement of the dispute over the sharing of Central funds.