Revenue of states may grow 7-9% this fiscal: Crisil Report
- IBEF
- August 25, 2022
According to Crisil Ratings, the top 17 states in the nation, which make up 85–90% of the total gross state domestic product (GSDP), would likely see a 7-9% increase in overall revenue this fiscal year. As a result of the pandemic-related slowdown in the economy, the revenue increased by 25% above a level base in the previous fiscal year.
The finances of large states such as of Maharashtra, Gujarat, Karnataka, Tamil Nadu, Uttar Pradesh, Telangana, and Rajasthan were examined in the report.
Goods and Services Tax (GST) collections and devolutions from the Center, which together comprise 43–45% of the states' revenue, are likely to show substantial double-digit growth this fiscal, which will underpin revenue growth.
The aggregate state GST revenues, which had already recovered by 29% YoY last fiscal, will provide the biggest boost to revenue growth.
On the other hand, the research predicted that state fuel tax collections would almost certainly remain range-bound. This is due to the fact that the reduction in the central excise on petrol and diesel in November 2021 and in May 2022, followed by a reduction in the sales tax rates in some states, would offset the effects of an anticipated 25% YoY increase in crude price in the current fiscal year and better sales volumes.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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