Post Devolution Revenue Deficit Grant

Post Devolution Revenue Deficit Grants are provided to the States under Article 275 of the Constitution.  Near about a third of the total revenue collected by the Centre is directly transferred to states as their share in the divisible pool. However, the Finance Commission also provides a mechanism for compensation of any loss incurred by states, which is called Post Devolution Revenue Deficit Grants The grants are released to the States in 12 monthly instalments as per the recommendations of the Fifteenth Finance Commission to meet the gap in Revenue Accounts of the States post devolution.  The Fifteenth Finance Commission has recommended a total Post Devolution Revenue Deficit Grant of Rs 1,18,452 crore to be paid to 17 States in the financial year 2021-22.

The States recommended for Post Devolution Revenue Deficit Grant are:

  1. Andhra Pradesh
  2. Assam
  3. Haryana
  4. Himachal Pradesh
  5. Karnataka
  6. Kerala
  7. Manipur
  8. Meghalaya
  9. Mizoram
  10. Nagaland
  11. Punjab
  12. Rajasthan
  13. Sikkim
  14. Tamil Nadu
  15. Tripura
  16. Uttarakhand
  17. West Bengal

The Department of Expenditure, Ministry of Finance on 6th May, 2021 has released the second monthly instalment of Post Devolution Revenue Deficit Grant of Rs 9,871 crore for the year 2021-22 to 17 States. With the release of second instalment, a total amount of Rs 19,742 crore has been released in the first two months of the current financial year (2021-22).

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