India's state governments to face 6.3% decrease in central grants-in-aid in FY25, causing financial strain.

India's state governments are projected to face increased financial strain in FY25, with a 6.3% decrease in central grants-in-aid, contrasting sharply with a 13.9% growth in FY24. States like Meghalaya and Assam, reliant on these funds, are particularly affected. Additionally, the growth in tax devolution from the Centre is expected to slow to 11%. Overall, combined central transfers will rise modestly by 4.5%, necessitating stricter financial management for the states.

October 20, 2024
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