Post Devolution Revenue Deficit

News: TheMinistry of Finance has released the second monthly instalment of Post Devolution Revenue Deficit (PDRD) Grant of Rs. 9,871 crore for the year 2021-22 to 17 States.

Post Devolution Revenue Deficit (PDRD):

  • The Centre provides the Post Devolution Revenue Deficit Grant to the States under Article 275 of the Constitution.
  • The grants are released as per the recommendations of the Finance Commission in monthly installments to meet the gap in Revenue Accounts of the States post-devolution (of the divisible tax pool of the Centre).
  • The 15th Finance Commission has recommended post devolution revenue deficit grants amounting to about Rs. 3 trillion over the five-year period ending FY26.
  • The number of states qualifying for the revenue deficit grants decreases from 17 in FY22, the first year of the award period to 6 in FY26, the last year.
  • The eligibility of States to receive this grant and the quantum of grant was decided by the Commission based on the gap between assessment of revenue and expenditure of the State.