States' revenue growth to slide to 7-9% despite robust GST collections

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Mumbai: States' revenue growth will slide to 7-9 per cent in FY23 even as handsome GST collections will help in the accretion, a report said on Wednesday.

The revenue growth had galloped 25 per cent in FY22 courtesy a lower base in the pandemic-affected FY21, the report by rating agency Crisil, which analysed 17 states accounting for 90 per cent of the aggregate GSDP, said.

In FY23, healthy tax buoyancy will be supporting the revenue growth, with Goods and Services Tax (GST) collections and devolutions from the Centre -- which together comprise up to 45 per cent of the states' revenue -- expected to show robust double-digit growth, it said.

The agency's senior director Anuj Sethi said the biggest impetus to the revenue growth will come from aggregate state GST collections, which had already rebounded by 29 per cent in FY22.

"We expect this momentum to sustain and collections to further increase 20 per cent this fiscal, supported by better compliance levels, higher inflationary environment and steady economic growth," Sethi said.

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