Lok Sabha Question No. 2721 (UNSTARRED), answered on 2025-03-17
Subject: Tax Devolution Policy
Ministry: FINANCE
Asked by: Dr. Shrikant Eknath Shinde, Shri Ravindra Dattaram Waikar, Smt. Shambhavi, Shri Rajesh Verma, Shri Naresh Ganpat Mhaske

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UN-STARRED QUESTION NO. 2721

TO BE ANSWERED ON MONDAY, THE 17 th  MARCH, 2025 PHALGUNA 26, 1946 (SAKA)

## Tax Devolution Policy

## 2721. Shri Rajesh Verma:

Shri Naresh Ganpat Mhaske:

Dr. Shrikant Eknath Shinde:

Smt. Shambhavi:

Shri Ravindra Dattaram Waikar:

Will the Minister of FINANCE be pleased to state:

- (a) the details of the devolution allocations to State Governments since 2019 and their significance, State-wise and year-wise;
- (b) the  measures  taken  to  ensure  transparency  and  accountability  in  the calculation and distribution of tax devolution to States;
- (c) the mechanisms put in place to address the needs of States with higher developmental gaps;
- (d) whether the Government has any plans to integrate dynamic factors like population growth, environmental sustainability and disaster resilience into the tax devolution framework, if so, the details thereof; and
- (e) whether the Government has any long-term plans to increase consultations with State Governments to develop a more inclusive and participatory approach to tax devolution policy, if so, the details thereof?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a): States' share of Union Taxes and Duties released to the States as per accepted recommendation of Finance Commission, since FY 2019-20 is given below:

(₹ Crore)

| State             |   2019-20 | 2020-21   | 2021-22   | 2022-23   | 2023-24   | 2024-25 (till 10.3.2025)   |
|-------------------|-----------|-----------|-----------|-----------|-----------|----------------------------|
| Andhra Pradesh    |  28242.4  | 24460.59  | 35385.83  | 38176.74  | 45710.74  | 52080.15                   |
| Arunachal Pradesh |   8987.57 | 10472.58  | 14643.90  | 16689.17  | 19845.22  | 22610.55                   |
| Assam             |  21721.4  | 18629.32  | 28150.55  | 29694.26  | 35330.57  | 40253.77                   |
| Bihar             |  63406.3  | 59861.41  | 91352.62  | 95509.85  | 113604.49 | 129434.93                  |
| Chhattisgarh      |  20205.8  | 20337.54  | 28570.86  | 32358.26  | 38481.88  | 43844.17                   |
| Goa               |   2479.85 | 2296.53   | 3356.98   | 3665.19   | 4359.85   | 4967.38                    |
| Gujarat           |  20232.1  | 20218.53  | 31105.78  | 33034.00  | 39283.63  | 44757.99                   |
| Haryana           |   7111.53 | 6437.59   | 9722.16   | 10378.00  | 12345.35  | 14065.65                   |
| Himachal Pradesh  |   4677.56 | 4753.92   | 7349.04   | 7883.98   | 9374.72   | 10681.24                   |
| Jammu& Kashmir    |   6801.81 | -         | -         | -         | -         | -                          |
| Jharkhand         |  20593    | 19712.23  | 27734.64  | 31404.12  | 37352.35  | 42557.30                   |
| Karnataka         |  30919    | 21694.11  | 33283.58  | 34596.18  | 41192.63  | 46932.72                   |
| Kerala            |  16401    | 11560.40  | 17820.09  | 18260.68  | 21742.92  | 24772.38                   |
| Madhya Pradesh    |  49517.6  | 46922.16  | 69541.50  | 74542.85  | 88665.34  | 101020.45                  |
| Maharashtra       |  36219.6  | 36504.01  | 54318.06  | 60000.98  | 71349.75  | 81292.84                   |
| Manipur           |   4047.77 | 4271.97   | 6009.65   | 6795.08   | 8087.14   | 9214.13                    |
| Meghalaya         |   4211.78 | 4551.63   | 6580.63   | 7286.14   | 8663.22   | 9870.40                    |
| Mizoram           |   3017.8  | 3010.55   | 4222.87   | 4745.25   | 5647.47   | 6434.44                    |
| Nagaland          |   3267.08 | 3409.25   | 4875.46   | 5400.19   | 6426.82   | 7322.37                    |
| Odisha            |  30453.2  | 27542.67  | 38144.79  | 42989.33  | 51143.68  | 58270.00                   |
| Punjab            |  10345.8  | 10638.21  | 15288.79  | 17163.65  | 20409.92  | 23254.04                   |
| Rajasthan         |  36049.1  | 35575.77  | 54030.61  | 57230.78  | 68063.21  | 77547.76                   |
| Sikkim            |   2407.69 | 2308.47   | 3353.69   | 3680.28   | 4382.44   | 4993.11                    |
| Tamil Nadu        |  26392.4  | 24924.51  | 37458.60  | 38731.24  | 46072.28  | 52491.88                   |
| Telangana         |  15987.6  | 12691.62  | 18720.54  | 19668.15  | 23742.04  | 27050.25                   |
| Tripura           |   4211.78 | 4218.45   | 6077.52   | 6724.23   | 7996.82   | 9111.14                    |
| Uttar Pradesh     | 117818    | 106687.01 | 160358.05 | 169745.30 | 202619.69 | 230854.62                  |

| Uttarakhand   |   6901.54 |   6568.72 |   9906.25 |   10617.01 |        12627.75 |        14387.36 |
|---------------|-----------|-----------|-----------|------------|-----------------|-----------------|
| West Bengal   |   48048.4 |     44737 |   65540.8 |    71434.9 | 84971.8         | 96812.4         |
| TOTAL         |  650677   |    594997 |  882904   |   948406   |     1.12949e+06 |     1.28689e+06 |

Part (b): The devolution of shareable portion of Union Taxes and Duties is made to States in accordance with the accepted recommendations of Finance Commission. As per Article 279(1)  of  the  Constitution  of  India, 'net  proceeds' calculated  for  the  purposes  of devolution is certified by the Comptroller and Auditor-General of India.

Part (c to e): The methodology based on which distribution of net proceeds of taxes between  the  Union  and  States  is  decided  by  the  Finance  Commission,  as  it  deems appropriate. During the process of preparing report, Finance Commission consults all stakeholders including the State Governments.