India gives states an extra Rs 1,09,019 crore in tax money ahead of festivals

India’s central government released an additional Rs 1,09,019 crore (about Rs 1.09 lakh crore) in tax money to state governments on Saturday 31 October 2026, ahead of the festive season. The Finance Ministry said the money is on top of the regular monthly share states receive, and is meant to help them speed up spending on roads, buildings and welfare schemes.

Uttar Pradesh received the largest share, Rs 19,208 crore, followed by Bihar with Rs 10,845 crore and Madhya Pradesh with Rs 8,010 crore. West Bengal received Rs 7,866 crore, Maharashtra Rs 7,022 crore and Rajasthan Rs 6,460 crore.

This is the second extra payment of its kind in the current financial year, 2026–27. The first, also Rs 1,09,019 crore, was released on 1 August 2026. Tax devolution is the system under which states receive a share of the taxes collected by the central government, so they can fund their own spending.

Why it matters

The timing matters because states often spend more around festivals, and the extra money arrives before that spending peaks. It gives state governments cash in hand to pay for capital projects — such as roads, schools and water systems — without waiting for their regular monthly share.

The scale is also large. The Union Budget for 2026–27 set aside Rs 15.26 lakh crore for tax devolution to states, up from Rs 13.93 lakh crore in the revised estimates for 2025–26. That is a rise of Rs 1.33 lakh crore. Under the framework based on the 16th Finance Commission, states receive 41 per cent of the divisible pool of central taxes.

What happens next

States will now decide how to use the money, and the Finance Ministry is expected to keep to its regular monthly payments alongside these extra instalments. The ministry said the release was made in view of the festive season and to let states speed up capital spending. The next test will be whether the funds turn into visible spending — new projects started and welfare payments made — rather than sitting in state accounts.

Watch for the next monthly devolution release and for state budget updates in the coming weeks, which should show how much of this money has been spent and where it went. If the money is spent quickly, it could also support jobs in construction and local services.

This article is for general information and education only. It is not legal or financial advice.

Sources

• https://www.newkerala.com/news/a/centre-releases-rs-109-lakh-crore-additional-tax-742.htm (New Kerala / ANI, 31 October 2026)
• https://jbiznews.com/india-advances-1-09-trillion-rupees-in-extra-tax-revenue-to-states/ (JBizNews, 31 October 2026)