Bhubaneswar: The Central Government on Friday released Rs 7,834.80 crore to Odisha as its share of tax devolution for January 2025. This amount, part of the advance installment of Rs 1,73,030 crore allocated to state governments, was distributed ahead of schedule to support state-level development and welfare initiatives.
Expressing gratitude to Prime Minister Narendra Modi and Union Finance Minister Nirmala Sitharaman, Chief Minister Mohan Majhi described the timely release as critical support for bolstering Odisha’s development agenda and improving services to its citizens.
The tax devolution in January 2025 nearly doubled to Rs 1,73,030 crore from Rs 89,086 crore in December 2024. According to the Centre, this increased allocation aims to help states accelerate capital expenditure and finance development and welfare programs.
Tax devolution is a constitutional mechanism for distributing Union tax revenues between the Centre and the states, based on recommendations from the Finance Commission. The 15th Finance Commission has maintained the states’ share of central taxes at 41 percent for the period 2021–2026, slightly reduced from the 42 percent recommended by the 14th Finance Commission due to the creation of the Union Territories of Jammu and Kashmir and Ladakh.
Odisha’s share of Rs 7,834.80 crore is part of a larger allocation across states. Uttar Pradesh received the highest amount of Rs 31,039.84 crore, followed by Bihar with Rs 17,403.36 crore, West Bengal with Rs 13,017.06 crore, and Maharashtra and Rajasthan with Rs 10,930.31 crore and Rs 10,426.78 crore, respectively. Smaller states like Goa and Sikkim were allocated Rs 667.91 crore and Rs 671.35 crore.
The Finance Commission determines the distribution of funds based on specific criteria. These include income (45 percent weightage), population (15 percent), area (15 percent), forest and ecology (10 percent), tax and fiscal efforts (2.5 percent), and demographic performance (12.5 percent).
The advance release of funds underscores the Centre’s efforts to empower states like Odisha to enhance public services, accelerate infrastructure development, and implement welfare schemes effectively.
