News Brief

Driven By Robust GST Collections, State Revenues To Grow By 8 To 10 Per Cent: CRISIL Ratings Report

Nishtha Anushree

Jul 03, 2024, 06:16 PM | Updated 06:16 PM IST


CRISIL Ratings report suggests that the revenues of the top 18 states contributing 90 per cent to India's Gross State Domestic Product (GSDP) will grow at a rate of 8 to 10 per cent in the ongoing financial year.

The revenue of these states grew by 7 per cent in the last financial year but the growth is expected to be more this time due to robust Goods and Service Tax (GST) collections.

Moreover, the Centre will also be devolving finances to the states, while the revenue from liquor sales is expected to be stable by contributing 10 per cent to states' revenues.

Senior Director of CRISIL Ratings Anuj Sethi believes that aggregate state GST collections, improved tax compliance and greater formalisation of the economy will play the biggest role in revenue growth.

With the devolution of 12 to 13 per cent more taxes from the Centre and 4 to 5 per cent more grants from the Centre, as stated in the Budget, the state revenues will witness greater rise.

CRISIL Ratings expects real Gross Domestic Product (GDP) to grow by 6.8 per cent in this financial year. Meanwhile, states will also need to expand their own revenue sources for stability.

Nishtha Anushree is Senior Sub-editor at Swarajya. She tweets at @nishthaanushree.

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