Kolkata: According to a report by CRISIL Ratings, the top 18 states in India, representing 90% of the country's gross state domestic product, are expected to see a revenue growth of eight to 10 percent to reach Rs 38 lakh crore in the current fiscal year. It was reported that the revenues of the 18 states increased by seven per cent in the previous fiscal year. According to the report, strong GST collections and financial transfers from the Centre, making up about half of state revenues, will mainly fuel the growth.
While revenue from liquor sales, accounting for ten percent of state revenues, is projected to stay steady, collections from sales tax on petroleum products and grants from the 15th Finance Commission will be relatively small.
CRISIL Ratings' Senior director Anuj Sethi stated that the primary driver of revenue growth will still stem from overall state GST collections, as well as enhanced tax adherence and increased formalization of the economy.
It is anticipated that there will be a 12 to 13 per cent increase in central tax devolutions in the current fiscal year, which will play a key role. Funding from the Centre will increase by four to five percent, consistent with the Budget allocation.
CRISIL Ratings stated that the estimations are based on a projected real GDP growth of 6.8 percent for the current fiscal year. In order to achieve continuous growth in income, states need to prioritize increasing their own revenues and enhancing collection efficiency.
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