The Government of India has approved an additional instalment of ₹81,735 crore as tax devolution to state governments, signalling a strong commitment to cooperative federalism and the ambitious vision of Viksit Bharat (developed India) by 2047. The Ministry of Finance announced this supplementary release will be made on June 2, 2025, in advance of the regular monthly instalment of ₹81,735 crore scheduled for June 10, 2025.

This significant step by the Centre aims to provide states with enhanced fiscal resources to accelerate capital expenditure, finance key development and welfare programmes, and allocate funds for high-priority projects. By advancing this additional instalment, the government seeks to strengthen the fiscal capacity of states at a crucial phase marked by robust economic growth and a focus on infrastructure expansion.

With over ₹1.63 trillion being devolved to states in June alone through this twin instalment release, the move is expected to boost public investment at the state level and ensure timely execution of government schemes and programmes critical for socio-economic development.

Viksit Bharat Vision

The additional tax devolution aligns with the Indian government’s vision of Viksit Bharat by 2047, which aims to build a strong, inclusive, and sustainable economy by the nation’s 100th year of independence. This vision prioritises high-quality growth, world-class infrastructure, empowered states, and social equity. Emphasising innovation, green development, and institutional reform, the goal is to transform India into a globally competitive and resilient nation.

Prime Minister Narendra Modi’s vision focuses on building strong, self-reliant states, and this early fund release reinforces the commitment to empowering states financially to fulfil their developmental mandates.

India’s FY25 GDP Performance

The timing of the additional instalment comes amid India’s strong economic performance in FY25. Provisional data released by the Ministry of Statistics and Programme Implementation shows that the Indian economy grew by 6.5 percent in real terms for the fiscal year 2024-25. The economy expanded by 7.4 percent in the January-March 2025 quarter, demonstrating sustained growth momentum despite global challenges.

Though these growth figures mark a moderation compared to FY24, where GDP grew 9.2 percent and Q4 growth stood at 7.8 percent, the overall economic activity remained robust. Key sectors such as agriculture, manufacturing, construction, mining, and services posted higher output in FY25 compared to the previous year, underpinning the country’s growth story.

Conclusion

The Centre’s decision to release an additional ₹81,735 crore tax devolution instalment reflects a strong policy push to enhance fiscal federalism and accelerate development across states. This proactive financial support will enable states to step up infrastructure spending, welfare programmes, and growth initiatives, playing a vital role in realising the Viksit Bharat 2047 vision and sustaining India’s economic momentum.

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