The mixed fiscal deficit of 24 Indian states, representing almost 92 per cent of the nation’s GDP, reached Rs 1.5 trillion or 1.8 per cent of GSDP within the first quarter of 2025-26 – April-June, in line with a report by ICICI Financial institution International Markets.
The ICICI Financial institution International Markets evaluation revealed that income receipts of those states grew 6.5 per cent year-on-year through the report, rebounding sharply from a 0.3 per cent decline in the identical interval final yr.
The development was pushed largely by stronger Personal Tax Income (OTR), with all main elements, besides excise responsibility, registering larger progress.
Publish-settlement State GST (SGST) collections rose 11.4 per cent year-on-year, whereas stamp responsibility, land income, and gross sales tax all posted wholesome beneficial properties, benefiting from a low base impact.
On the expenditure facet, income expenditure remained broadly flat, however capital expenditure (capex) maintained its sturdy momentum, surging 28 per cent within the first quarter of 2025-26, after a steep 22 per cent contraction in the identical quarter final fiscal, the ICICI Financial institution International Markets report asserted.
This uptick in capex pushed general expenditure progress to just about double the tempo seen in the identical interval final yr.
June 2025 information underscored the bottom impact, with whole receipts rising 16.8 per cent year-on-year and income receipts rising 15.6 per cent year-on-year.
Tax income climbed 14.3 per cent, led by a 28 per cent leap in State OTR. SGST collections spiked 37.5 per cent year-on-year, aided by post-IGST and enter tax credit score settlements in earlier months.
Whereas stamp responsibility progress moderated to six.2 per cent year-on-year, gross sales tax and different taxes recorded sturdy beneficial properties of 36 per cent and 37 per cent, respectively. State excise responsibility and land income posted extra modest will increase of 8 per cent and 1 per cent year-on-year.
Transfers from the Centre rose sharply by 42 per cent year-on-year in June, with grants-in-aid increasing almost 50 per cent to Rs 332 billion. Capital receipts elevated to Rs 31 billion, at the same time as non-tax income noticed a 3 per cent year-on-year contraction.
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