The GoI released Rs. 1.3 trillion as tax devolution to all states on February 10, 2026, a 19% increase over the Rs. 1.1 trillion transferred in the same month last year. Based on the GoI’s FY2026 Revised Estimates for tax devolution (Rs. 13.9 trillion), the transfer of amount in March 2026 is also expected to be Rs. 1.3 trillion, reflecting a similar ~19% YoY rise. 

However, the total tax devolution for Q4 FY2026 is estimated at Rs. 3.5 trillion, ~8% lower than the Rs. 3.9 trillion released in Q4 FY2025. This decline is primarily driven by the drop in January 2026 transfers on a YoY basis, as the GoI had issued two instalments of tax devolution in January 2025, unlike in the current fiscal.

EXHIBIT: Spread between weighted average cut-off of 10-year state and GoI G-sec yield