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State Revenue Dependency Trends
January 21 , 2025
7 hrs 0 min
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- Over the last decade, States have been relying more and more on transfers and grants from the Centre.
- In the last decade (FY16 to FY25), 23-30% of the total revenue of States was collected from the Centre as transfers.
- However, in the 2000s and the first half of 2010, the share was 20-24%.
- Also, close to 65-70% of the non-tax revenue of States was collected from the Centre as grants in the last decade compared to the 2000s.
- Many States are not efficiently collecting taxes using avenues at their disposal.
- For Tamil Nadu, the own tax revenue to GSDP ratio has gradually declined from 7.72% in FY13-15 to 6.17% in FY 22-24.
- This has also been the case in Karnataka, Kerala, Bihar, Delhi, and Madhya Pradesh, too.
- While the ratio has risen in Maharashtra, Manipur, Meghalaya, Odisha, and Uttarakhand, it has remained stagnant in other States.
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