Kolkata, Jul 29 (PTI) Crisil Ratings on Tuesday said that revenue growth of large states is likely to witness a marginal uptick at 7-9 per cent to Rs 40 lakh crore this financial year.
In its research report, the rating agency said this is slightly higher than 6.6 per cent notched up in the last fiscal, though lower than the decadal growth of around 10 per cent.
The research report said the revenue growth of 18 large states, which account for over 90 per cent of the gross state domestic product, is likely to witness an uptick at 7-9 per cent on-year this financial year, amounting to around Rs 40 lakh crore.
The increase in revenue growth will be supported by steady GST collections and devolution by the Centre, the report said.
Maharashtra, Gujarat, Karnataka, Tamil Nadu and West Bengal are among the 18 large states.
The states’ revenue streams comprise two components, namely own tax revenue and transfers from the Centre.
The own tax revenue of these states is expected to grow around eight per cent this financial year, driven by GST and liquor tax, with a modest growth in petroleum tax, the report said.
Grants from the Centre are expected to recover and grow by three to four per cent due to higher outlay of centrally sponsored schemes.
The calculations assume India’s nominal GDP growth of nine per cent this fiscal. However, global uncertainties, domestic consumption patterns and inflationary trends can alter these estimates, the report said.
To ensure sustainable revenue growth, the states will have to focus on expanding their own revenue and improving collection efficiency, the report added. PTI DC BDC
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