Of the 14 states, the maximum grant-in-aid has gone to Kerala -- an amount of Rs 1,277 crore.

Centre releases Rs 6195 crore to 14 states from post devolution revenue deficit grant
Money Finance Wednesday, June 10, 2020 - 18:19

In an attempt to assist state governments to effectively address situation arising out of Covid-19, the Central Government on Wednesday released the third instalment of states' share of revenue deficit grant amounting to over Rs 6,000 crore. This is part of the ‘Post Devolution Revenue Deficit Grant’ as recommended by the 15th Finance Commission.

The grant had been released for 14 states including Andhra Pradesh, Kerala, Himachal Pradesh, West Bengal, Uttarakhand, Tamil Nadu, Punjab, Sikkim and six North Eastern states excluding Arunachal Pradesh.

"The government on June 10, 2020 released Rs 6,195.08 crore to 14 states as the third equated monthly instalment of the Post Devolution Revenue Deficit Grant as recommended by the 15th Finance Commission. This would provide them additional resources during the Corona crisis," Nirmala Sitharaman's office said in a tweet.

The money has been released ahead of schedule and as a special dispensation to meet immediate funding needs of the state governments looking to restore economic activity and minimise losses to its citizens due to disruptions caused by lockdowns.

Of the 14 states, the maximum grant-in-aid has gone to Kerala -- an amount of 1,277 crore followed by Himachal Pradesh with revenue deficit grant of Rs 953 crore. Andhra Pradesh received Rs 491 crore, while Tamil Nadu received Rs 335 crore.

Much of this money is expected to be used by states towards paying the salaries to their staff as sharp fall in tax collections in April has already put pressure on their accounts.

This comes after the Finance Ministry released Rs 36,400 crore to states as compensation for their revenue loss in the goods and services tax (GST) regime for the period from December 2019 to February 2020.

With this the Centre has released its entire GST compensation due to states for financial year 2019-20 and also given extra compensation for February that is accounted for in the current fiscal FY21.

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