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In order to enable the states to step up their capex and spur economic growth close to double digits this fiscal year, Union Finance Minister Nirmala Sitharaman has said that the Centre will release Rs 95,082 crore as tax devolution to the states this month after including one advance instalment. She said ‘I have suggested the Finance Secretary that on November 22 instead of normal Rs 47,541 crore, the states be given one more instalment. So Rs 95,082 crore will be given to states on November 22.’

She added, so, with this, states will have more money in their hands so that they can consider spending it for infrastructure creation. She also said two states -- Madhya Pradesh and Sikkim -- asked for further relaxation in the Fiscal Responsibility and Budget Management (FRBM) Act. States are allowed to borrow from the markets to the extent that it does not increase their fiscal deficit beyond 3 per cent of their gross state domestic product (GSDP).

They can borrow 2 per cent more this fiscal year, 1 per cent with riders and 1 per cent is unconditional. Besides, finance Secretary T V Somanathan said currently, 41% of tax collected is devolved in 14 instalments and states have a predictability of their cash flows. He added this is an advance release, and any adjustments will be made in March.