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Indian States Poised for Stronger Revenue Growth Driven by GST and Central Transfers
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CNBC TV18•22-09-2026, 18:05
Indian States Poised for Stronger Revenue Growth Driven by GST and Central Transfers
- •Revenue for 18 large Indian states is projected to grow 9%-11% year-on-year, reaching over ’44 lakh crore by fiscal 2027, accelerating from an estimated 8% growth last fiscal.
- •The primary drivers for this improved growth are expected to be higher Goods and Services Tax (GST) collections and increased tax transfers from the Centre.
- •GST is anticipated to be the biggest contributor, with collections forecast to rise 12%-13% in fiscal 2027, supported by domestic consumption and import-related GST (IGST).
- •Tax transfers from the Centre are expected to grow 11%-12%, boosted by a recovery in personal income-tax collections and stronger nominal economic growth.
- •Revenue from liquor sales is projected to increase 7%-8%, while petroleum-tax revenue is expected to grow 4%-5%, with other state-collected taxes, including stamp duty, rising 6%-7%.
Key Questions Answered
The revenue of 18 large Indian states is expected to grow by 9% to 11% year-on-year, crossing ₹44 lakh crore in fiscal 2027 according to Crisil Ratings.
The revenue improvement is projected to be driven mainly by higher collections from the goods and services tax (GST) and larger tax transfers from the Centre.
GST collections are projected to rise by 12% to 13% in fiscal 2027, remaining the biggest driver of state revenue growth.
