With reference to the tax devolution released by the Finance Ministry, consider the following statements: 1. The total tax devolution instalment released to State governments was ₹1.09 lakh crore. 2. Karnataka received a share of ₹19,208 crore. 3. Uttar Pradesh received the highest share of ₹4,504 crore. Which of the statements given above is/are correct?

Centre releases ₹1.09 lakh crore tax devolution; Uttar Pradesh gets highest ₹19,208 crore

GS3Economy · S&T · Environment · Security· Fiscal policy, budget & taxation (GST)· Prelims· 1 November 2026

Fiscal federalism and vertical fiscal imbalance: a key GS3 topic on cooperative federalism.

Why in news

The Finance Ministry released an additional tax devolution instalment of over ₹1.09 lakh crore to State governments to fund capital spending and welfare expenditure.

Background

The Centre released ₹1.09 lakh crore in tax devolution to states. Uttar Pradesh received the highest share of ₹19,208 crore, while Karnataka received ₹4,504 crore.

Facts for Prelims

FactTotal tax devolution instalment released: ₹1.09 lakh crore
FactUttar Pradesh's share of devolution: ₹19,208 crore
FactKarnataka's share of devolution: ₹4,504 crore
BodyFinance Ministry: Responsible for the release of tax devolution funds

Prelims practice question

With reference to the tax devolution released by the Finance Ministry, consider the following statements:

The total tax devolution instalment released to State governments was ₹1.09 lakh crore.
Karnataka received a share of ₹19,208 crore.
Uttar Pradesh received the highest share of ₹4,504 crore.

Which of the statements given above is/are correct?

(a)1 only
(b)2 only
(c)3 only
(d)1 and 3 only

Show answer

Answer: (a) 1 only — Statement 1 is correct. Statement 2 is incorrect: Karnataka received ₹4,504 crore. Statement 3 is incorrect: Uttar Pradesh received the highest share of ₹19,208 crore.

For Mains

Q. Discuss the significance of tax devolution in strengthening cooperative federalism and ensuring balanced regional development in India.

Dimensions to cover in your answer

Fiscal autonomy: Balancing state-level developmental priorities with central fiscal oversight
Vertical imbalance: Addressing the disparity between central tax collection and state expenditure requirements

Keywords: Cooperative Federalism · Fiscal Devolution · Capital Expenditure · Vertical Fiscal Imbalance · Developmental Expenditure

Read the full news →Report a mistake in this note How notes are made Source: The Hindu ↗Also: GS2 · Government policies & schemes Also: GS2 · Federalism & Centre-State relations

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