These states, which account for more than 90 per cent of India's gross state domestic product, grew at 7.5 per cent last financial year, according to a CRISIL Ratings report.
While revenue from tax on sale of liquor (10 per cent of total revenue) will remain stable, there will be a mid-single digit increase in sales tax collections from petroleum products (7-8 per cent) and grants (10-11 per cent) as recommended by the 15th Finance Commission. ) will be minor.
"The biggest boost to revenue growth will continue to come from overall state GST collections, which will grow by 13-14 per cent in the current financial year after growing 18 per cent annually in the last financial year," senior director Anuj Sethi said. , CRISIL Ratings.
Central tax transfers, expected to grow by 12-13 per cent this fiscal year, will be the second important driver.
While the proportion of the transfer is determined by the Finance Commission, the overall kitty is linked to the gross tax collection by the Centre.
The report said this pool, which grew at 19 per cent in the last fiscal, should grow at a healthy pace this fiscal too, supported by rising income tax and GST collections.
"There will be a modest growth of 3-4 per cent year-on-year in revenue from sales tax on petroleum products this fiscal year after a slowdown in the last fiscal year. This will be generated by higher fuel consumption driven by vehicle and industrial activity, even though the tax structure will be largely remains unchanged,” said Aditya Jhaver, director, CRISIL Ratings.
While revenue from tax on sale of liquor (10 per cent of total revenue) will remain stable, there will be a mid-single digit increase in sales tax collections from petroleum products (7-8 per cent) and grants (10-11 per cent) as recommended by the 15th Finance Commission. ) will be minor.
"The biggest boost to revenue growth will continue to come from overall state GST collections, which will grow by 13-14 per cent in the current financial year after growing 18 per cent annually in the last financial year," senior director Anuj Sethi said. , CRISIL Ratings.
Central tax transfers, expected to grow by 12-13 per cent this fiscal year, will be the second important driver.
While the proportion of the transfer is determined by the Finance Commission, the overall kitty is linked to the gross tax collection by the Centre.
The report said this pool, which grew at 19 per cent in the last fiscal, should grow at a healthy pace this fiscal too, supported by rising income tax and GST collections.
"There will be a modest growth of 3-4 per cent year-on-year in revenue from sales tax on petroleum products this fiscal year after a slowdown in the last fiscal year. This will be generated by higher fuel consumption driven by vehicle and industrial activity, even though the tax structure will be largely remains unchanged,” said Aditya Jhaver, director, CRISIL Ratings.