ECONOMY & INFRASTRUCTURE
Economic Affairs
Union Government Grants Additional Tax Devolution Release of Over ₹1.09 Lakh Crore to States
The Union Government released an additional instalment of net tax devolution amounting to ₹1,09,019 crore to state governments ahead of the routine monthly schedule.
This release comes in addition to the standard monthly tax devolution allotment programmed for August 10, 2026, aimed at helping states accelerate developmental capital expenditure.
Under constitutional mandates and current Finance Commission guidelines, the Center shares 41% of net collectible taxes from the divisible pool with states.
Uttar Pradesh secured the largest share of the devolution pool at ₹19,208 crore, followed by Bihar (₹10,845 crore), Madhya Pradesh (₹8,010 crore), West Bengal (₹7,866 crore), and Maharashtra (₹7,022 crore).
Exam Perspective: Timely fiscal transfers enhance liquidity for state governments, ensuring continuity in regional development and public infrastructure investments.
This release comes in addition to the standard monthly tax devolution allotment programmed for August 10, 2026, aimed at helping states accelerate developmental capital expenditure.
Under constitutional mandates and current Finance Commission guidelines, the Center shares 41% of net collectible taxes from the divisible pool with states.
Uttar Pradesh secured the largest share of the devolution pool at ₹19,208 crore, followed by Bihar (₹10,845 crore), Madhya Pradesh (₹8,010 crore), West Bengal (₹7,866 crore), and Maharashtra (₹7,022 crore).
Exam Perspective: Timely fiscal transfers enhance liquidity for state governments, ensuring continuity in regional development and public infrastructure investments.
Key Facts / Static GK
Constitutional Provision for Finance Commission: Article 280
Current Tax Devolution Share to States: 41% (as per 15th Finance Commission)
Current Tax Devolution Share to States: 41% (as per 15th Finance Commission)
Practice Quiz — 5 August 2026
Q1. Which of the following statements regarding the RBI's updated Bulk Deposit Interest Rate Directions 2026 is/are correct?
Answer: (B) Both statements I and II are correct — Statement I: The framework allows differential rates on bulk deposits based on LCR run-off rates from October 1, 2026. Statement II: Commercial banks and SFBs share a bulk deposit threshold of ₹3 crore, while RRBs have a threshold of ₹1 crore.
Q2. Under the revised CGSMFI 2.0 guidelines, what is the mandatory minimum combined allocation percentage of guarantee cover reserved for small and medium MFIs?
Answer: (C) 15% — Banks must now allocate at least 15% of the total guarantee cover under CGSMFI 2.0 to small and medium-sized MFIs, replacing the previous segregated structure of 5% and 10%.
Q3. Which agency constructed the new Income Tax Department office complex 'Aayakar Sindhu' inaugurated in Mumbai?
Answer: (B) Central Public Works Department (CPWD) — The 'Aayakar Sindhu' office complex in Nariman Point, Mumbai, was constructed by the Central Public Works Department (CPWD).
Q4. Which Non-Banking Financial Company (NBFC) has partnered with Flipkart as the principal lending partner for 'Flipkart Pay Later'?
Answer: (B) PayU Finance — PayU Finance, the NBFC arm of PayU, serves as the primary licensed lender for the Flipkart Pay Later digital credit solution.
Q5. Which founding document led to the formal establishment of the Arctic Council in 1996?
Answer: (B) Ottawa Declaration — The Arctic Council was officially established in 1996 through the adoption of the Ottawa Declaration.
Keep Learning with PrepZen
Get daily current affairs, live mock tests, mistake bank, vocab builder & more — all free on your phone.