New Delhi [India], April 18 (ANI): Indian states are expected to see slower income growth in the monetary 12 months 2025-26 (FY26) in contrast to FY25, primarily due to weaker growth in non-tax income.
This was highlighted in a current report by ICICI Financial institution, which analysed funds paperwork of 15 states that collectively contribute round 90 per cent of India’s GDP.
The report mentioned, “States have penciled in lower income growth in FY26 in contrast to FY25 (13% vs 16%) on account of lower growth in ‘Personal Tax Revenue’ and ‘Transfers from the Middle”.
In accordance to the report, the overall receipts of these states are estimated to develop by 12 per cent 12 months-on-12 months (YoY) in FY26 to Rs 59 trillion. Compared, the growth in complete receipts for FY25 is estimated at 16 per cent.
Revenue receipts, which account for almost three-fourths of complete receipts, are expected to rise by 13 per cent YoY to Rs 43 trillion in FY26, down from 16 per cent growth in FY25.
The slowdown in income growth is principally as a result of of weaker efficiency in non-tax income and central transfers. Non-tax income is expected to develop by simply 12 per cent in FY26, in contrast to 23 per cent in FY25. Equally, transfers from the central authorities are expected to rise by solely 10 per cent, in contrast to 18 per cent in the earlier 12 months.
States’ Personal Tax Revenue (SOTR) is expected to stay regular, rising by 14 per cent in FY26 to Rs 23 trillion, comparable to the growth seen in FY25.
Compared, the central authorities’s Internet Tax Revenue is budgeted to develop by 11 per cent over FY25 Revised Estimates to Rs 29 trillion.
The report additionally reviewed the precise income receipts for FY25 to this point. Between April and February, states collected 75 per cent of their FY25 income goal of Rs 38 trillion. Nevertheless, there’s a danger that states could not meet their full-12 months income targets, particularly due to the underperformance of non-tax income. As of now, non-tax income stands at Rs 2 trillion towards the goal of Rs 3.6 trillion.
General, whereas tax revenues stay secure, the slowdown in different income streams could have an effect on the states’ fiscal place in FY26. (ANI)
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