For faster development and capital investment, the Central government has allotted a supplementary tranche for states, including Rs 8,400 crore for Rajasthan, in addition to the routine disbursement of tax devolution. Rajasthan receives the largest share among the 28 states, followed by Uttar Pradesh (Rs 25,069 crore), Bihar (Rs 14,056 crore), Madhya Pradesh (Rs 10,970 crore), West Bengal (10,513 crore), and Maharashtra (8,828 crore).
Rajasthan received Rs 65,500 crore and Rs 57,150 crore in fiscal years 2023-24 and 2022-23, respectively.
While the distribution of taxes is determined by several factors, the state government led by the Congress has earlier expressed dissatisfaction about the Center’s decision to lower Rajasthan’s receivables.
The horizontal devolution method used to determine the share allocation weights demographic performance at 12.5%, income at 45%, population and area at 15%, forest and ecological at 10% and tax and fiscal efforts at 2.5%.
Furthermore, the central government provides performance-based incentives and subsidies to states in sectors like health and education, rural economy and infrastructure, governance and administrative reforms and the power sector.
Additionally, local governments get funding for the development of new cities and health-related projects. Basic funds for urban local bodies are awarded to cities or towns with populations of less than one million.
