Centre Releases ₹1.09 Lakh Crore Tax Devolution to 28 States
The Union Ministry of Finance disbursed ₹1,09,019 crore to 28 states as a regular monthly instalment of tax devolution on 5 November 2026. Uttar Pradesh received the largest allocation of ₹19,208 crore, while Sikkim received the lowest share at ₹365 crore under the 41% vertical devolution formula.
What happened
The Ministry of Finance, Government of India, released a regular instalment of tax devolution amounting to ₹1,09,019 crore to state governments on 5 November 2026. This disbursement was advanced five days ahead of its scheduled date of 10 November 2026 to support states during the festive season. The move is aimed at enabling state administrations to accelerate capital expenditure and finance their welfare and developmental projects.
This transfer follows two earlier additional instalments released by the Centre during the financial year 2026–27. The first additional instalment of ₹1,09,019 crore was disbursed on 1 August 2026, followed by a second additional instalment of the same amount on 31 October 2026. With the latest release, funds have been credited directly across all 28 states in accordance with the vertical devolution framework.
Among the states, Uttar Pradesh received the highest devolution of ₹19,208 crore, accounting for approximately 17.6% of the total amount. Bihar secured the second-highest share with ₹10,845 crore, while Madhya Pradesh ranked third with ₹8,010 crore. Other substantial allocations included West Bengal at ₹7,866 crore, Maharashtra at ₹7,022 crore, Rajasthan at ₹6,460 crore, Odisha at ₹4,819 crore, Andhra Pradesh at ₹4,597 crore, Karnataka at ₹4,504 crore, and Tamil Nadu at ₹4,466 crore. Sikkim received the smallest allocation at ₹365 crore, followed by Goa at ₹398 crore.
Important dates
| First additional tax devolution instalment of FY 2026–27 released | 1 August 2026 |
|---|---|
| Second additional tax devolution instalment of FY 2026–27 released | 31 October 2026 |
| Advance release of monthly tax devolution to states | 5 November 2026 |
| Original scheduled date for regular November tax devolution | 10 November 2026 |
📌 Static GK links
- Article 280 of the Constitution of India provides for the establishment of the Finance Commission by the President.
- The Finance Commission recommends the distribution of the net proceeds of taxes between the Centre and the states (vertical devolution) and among the states (horizontal devolution).
- Under the existing framework, 41% of the divisible tax pool is allocated to states.
- Devolution amounts are typically distributed to state governments across 14 instalments in a financial year.
What candidates should do
- Revise constitutional provisions under Article 280 regarding Finance Commission recommendations and tax sharing mechanisms.
- Note the top three and bottom two state recipients along with their specific disbursement figures for upcoming banking and regulatory exams.
- Track the concept of vertical versus horizontal tax devolution for descriptive and general studies papers.
PrepZen analysis
Tax devolution is a vital component of fiscal federalism in India, providing untied financial resources to state governments. By advancing the scheduled release by five days, the central government provided immediate liquidity to state treasuries to manage festive expenditures and support capital projects without resorting to short-term market borrowing.
For competitive examinations, questions on this topic typically intersect Indian Polity and Economy. Aspirants should expect objective questions on the constitutional article governing the Finance Commission (Article 280), the exact vertical devolution percentage (41%), and current data on state-wise allocations, particularly the highest and lowest recipient states.
Practice questions
Q1. How much regular tax devolution was disbursed by the Central Government to the states in November 2026?
Q2. Which state received the highest share in the tax devolution disbursed on 5 November 2026?
Q3. Which Article of the Constitution of India mandates the setting up of the Finance Commission to recommend tax devolution?
Uttar Pradesh received the largest share amounting to ₹19,208 crore.
Bihar ranked second with ₹10,845 crore, while Sikkim received ₹365 crore.
Sixteenth Finance Commission mandates 41% vertical devolution of the divisible tax pool.
🎯 Key Point: Centre devolved ₹1,09,019 crore to 28 states; UP received highest.
FAQs
What percentage of the central divisible tax pool is devolved to states?
Under the current Finance Commission mandate, 41% of the central divisible pool of taxes is devolved to state governments.
Which state received the lowest tax devolution in the November 2026 release?
Sikkim received the lowest share among all states, receiving ₹365 crore. Goa received the second-lowest share at ₹398 crore.
Why was the tax devolution released ahead of the scheduled date?
The transfer was advanced five days ahead of the routine 10 November schedule to assist states in funding capital expenditure and welfare spending during the festive season.
How many states received a share in the ₹1.09 lakh crore disbursement?
All 28 Indian states received a share of the ₹1,09,019 crore tax devolution released by the Union Government.
Sources and references
- finin2min.com (finin2min.com)
- chartforest.com (chartforest.com)
- drishtiias.com (www.drishtiias.com)
- economictimes.com (economictimes.indiatimes.com)
Prepared by PrepZen for exam preparation. Consult the linked sources for original announcements and current details. Corrections policy. Spotted an error? Write to prepzen.app@gmail.com.
Practice Quiz — 7 November 2026
Q1. Union Minister Hardeep Singh Puri was elected unopposed to the Rajya Sabha from which state?
Q2. Which ministry won the 1st position in the category 'Maximum Buildings Solarized by Central Ministries/Departments' at the PM Surya Ghar Excellence Award 2026?
Q3. Which state received the highest allocation in the ₹1,09,019 crore monthly tax devolution released by the Centre?
Q4. What is the total financial outlay approved by the Union Cabinet for the VISTAR scheme for the period 2026-27 to 2030-31?
Q5. Which indigenously developed submersible will be deployed under India's Samudrayaan mission to carry three aquanauts to depths of 6,000 metres?
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