India’s Top 18 States to See Revenue Growth of 8-10% This Fiscal: CRISIL

“The biggest impetus to revenue growth will continue to come from aggregate state GST collections that, after growing ~18% on-year last fiscal, will climb up another 13-14% in the current fiscal. This will be driven by the resilience of the Indian economy to global turbulence, improving tax compliance, and the shift in economic activity from unorganised to the organised sectors, leading to greater formalisation of the economy,” said Anuj Sethi, Senior Director, CRISIL Ratings.The projected growth will vary based on the volatility in the global economy and its impact on Indian economy, the markets analytics firm said in its report. Moreover, central tax devolution is expected grow by 12-13 per cent. The firm suggested in its report that state should keep their eyes on their own revenue and improving tax collection efficiencies. “Revenue from sales tax on petroleum products will grow a modest 3-4% on-year this fiscal after a flattish last fiscal. This will stem from higher fuel consumption driven by vehicular and industrial activity, even as the tax structure remains largely unchanged. While consumption is expected to grow ~5-6 per cent, cuts in the prices of petrol and diesel undertaken this March will impact growth in sales tax collections by ~200 bps” said Aditya Jhaver, Director, CRISIL RatingsThe 18 states include Maharashtra, Gujarat, Karnataka, Tamil Nadu, Uttar Pradesh, Telangana, Rajasthan, West Bengal, Madhya Pradesh, Andhra Pradesh, Kerala, Odisha, Punjab, Bihar, Chhattisgarh, Haryana, Jharkhand and Goa.

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