← 1 November 2026's Current Affairs · Polity GA Prelims ★★★★☆ Mains ★★★☆☆
Centre releases ₹1.09 lakh crore additional tax devolution instalment to States
ଖବରରେ କାହିଁକି?
₹1.09 lakh crore sent to States early: the Article 280 Finance Commission rule behind it
Additional ₹1.09 lakh crore tax devolution released to States before the festival season.
Why it matters: asked in UPSC 2025
What you need to know
2 ମିନିଟ
The Centre released an additional instalment of tax devolution of ₹1.09 lakh crore to the States ahead of the festival season, to give them more resources for development and expenditure.
Devolution of the divisible pool of Union taxes follows the recommendations of the Finance Commission, which the President constitutes under Article 280.
ଉତ୍ସ: Topper IAS editorial (PIB / The Hindu / Indian Express)
ମୁଖ୍ୟ ତଥ୍ୟ
Remember these
- The Centre released an additional tax devolution instalment of ₹1.09 lakh crore to the States ahead of the festival season.
- Tax devolution is the States' share of the divisible pool of Union taxes.
- The Finance Commission is constituted by the President under Article 280.
- The Finance Commission recommends how net tax proceeds are shared between the Union and the States.
- The Commission is a constitutional body that is set up periodically, normally every five years.
ପ୍ରିଲିମ୍ସ · ମେନ୍ସ
How the exam will ask it
ପ୍ରିଲିମ୍ସ
- The Finance Commission is constituted by the President under Article 280 of the Constitution.
- It recommends the distribution of the net proceeds of taxes between the Union and the States, and among the States.
- The divisible pool of Union taxes is shared with the States on the basis of Finance Commission recommendations.
- An additional devolution instalment gives States extra funds for development and expenditure, beyond the regular instalments.
ମେନ୍ସ
GS2 (Centre-State financial relations) and GS3 (public finance). Issue: States depend on timely transfers from the divisible pool to fund development and spending. Provision: Article 280 and Finance Commission recommendations govern the share of taxes. Implication: early releases ease State cash flows and support capital spending. Way forward: predictable, transparent transfers and a smaller share of cesses and surcharges outside the divisible pool would strengthen fiscal federalism.
PYQ connection
A question UPSC has already asked on this
Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct? I. It has recommended grants of Rs. 4,800 crores from the year 2022-23 to the year 2025-26 for incentivizing States to enhance educational outcomes. II. 45% of the net proceeds of Union taxes are to be shared with States. III. Rs. 45,000 crores are to be kept as performance-based incentive for all States for carrying out agricultural reforms. IV. It reintroduced tax effort criteria to reward fiscal performance. Select the correct answer using the code given below.
- I, II and III
- I, II and IV
- I, III and IV
- II, III and IV
ଉତ୍ତର ଦେଖନ୍ତୁ
ଉତ୍ତର: C
Why this matters: today's issue is directly connected to a concept UPSC has already tested. Read the story with this question in mind.
Practise this PYQ →Quick recall
Answer before you reveal
The Centre recently released an additional instalment of tax devolution to the States. With reference to the Finance Commission of India, consider the following statements:
- It is constituted by the President under Article 280 of the Constitution.
- It recommends how the net proceeds of taxes are to be distributed between the Union and the States.
Which of the statements given above is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
ଉତ୍ତର ଦେଖନ୍ତୁ
ଉତ୍ତର: C — Correct: Both 1 and 2 — Both hold: the President constitutes it under Article 280 and it recommends the Union-State sharing of tax proceeds. • 1 only — wrong: Statement 2 is also correct, because sharing the net tax proceeds is a core duty of the Commission. • 2 only — wrong: Statement 1 is also correct, because Article 280 provides for the President to constitute it. • Neither 1 nor 2 — wrong: Both statements are factually correct, so denying them both is wrong.
Convert this topic into marks
Today's 10-MCQ test · instant analysis · Powered by AdaptIQ