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Fund transfers to states under decline
Mint Bangalore
|March 26, 2025
The grants, meant to cover post-devolution revenue shortfalls, fell to ₹24,483 crore in 2024-25, from ₹1.18 trillion in 2021-22
The Centre's revenue deficit grants to states have sharply declined in recent years, reducing the funds states receive under the 15th Finance Commission's recommendations.
The grants, meant to cover post-devolution revenue shortfalls, fell from ₹1.18 trillion in 2021-22 to ₹24,483 crore in 2024-25, with a further drop to ₹13,705 crore expected in 2025-26, budget documents show.
The steep decline reflects a broader fiscal strategy aimed at reducing states' reliance on central transfers and promoting financial self-sufficiency.
The post-devolution revenue deficit grant, provided under Article 275 of the Constitution, helps states bridge gaps in their revenue accounts after tax devolution.
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