Revenue of top 10 states to exceed the pre-covid levels
The revenue of the top 10 states in India is all set to exceed the pre-Covid levels by 600 basis points in FY22. These states account for about 70% of the aggregate gross domestic product.
The surge will be driven by the buoyancy of the higher tax, increased grants as per the 15th Finance Commission and the sales tax collections from diesel and petrol.
The rating agency said that the aggregate goods and the service tax collections are known as the GST, which accounts for a fifth of the revenues of the state had recovered really well in the fourth quarter of the FY21 as the economic activity is back and this momentum continued in FY22 with April and with May collections which was an average of Rs. 0.93 lakh crore and it marks around 11% growth on the year.
“While the second wave of the pandemic may moderate GST collections in June and July, we expect a recovery to pre-pandemic levels by August,” said Manish Gupta, senior director at Crisil Ratings. He also said that Crisil expects the GDP of India to grow 9.5% this fiscal, which should assist the collections of GST to marginally better the levels of pre-pandemic.
“Revenues of India’s top 10 states, which plunged 600 basis points (bps) last fiscal, are set to exceed the pre-pandemic or the fiscal 2020- levels by 600 basis points this fiscal”, said the agency.
The states in which the revenues were discussed were – Maharashtra, Karnataka, Gujarat, Tamil Nadu, Uttar Pradesh, Rajasthan, Madhya Pradesh, West Bengal and Kerala.