The combined fiscal deficit of 24 Indian states, accounting for nearly 92% of the country’s GDP, stood at Rs 1.5 trillion, or 1.8% of their gross state domestic product (GSDP), in the April–June quarter of FY26, according to ICICI Bank Global Markets.
The report said revenue receipts grew 6.5% year-on-year, recovering from a 0.3% contraction in the same quarter last year, ANI reported.
The rebound was driven by stronger Own Tax Revenue (OTR), with all major heads except excise duty registering gains. Post-settlement State GST (SGST) collections rose 11.4% year-on-year, while stamp duty, land revenue and sales tax recorded healthy increases, aided by a low base.
On the expenditure side, revenue expenditure was broadly flat, but capital expenditure (capex) jumped 28% in Q1, reversing a steep 22% fall in the year-ago period. This capex boost pushed overall expenditure growth to nearly twice last year’s pace, the report noted.
June 2025 data reflected the base effect, with total receipts up 16.8% year-on-year and revenue receipts rising 15.6%. Tax revenue climbed 14.3%, led by a 28% surge in OTR. SGST collections spiked 37.5%, supported by post-IGST and input tax credit settlements in previous months.
While stamp duty growth moderated to 6.2%, sales tax and other taxes rose 36% and 37%, respectively. State excise duty and land revenue increased 8% and 1%.
Transfers from the Centre rose 42% year-on-year in June, with grants-in-aid up nearly 50% to Rs 33,200 crore. Capital receipts increased to Rs 3,100 crore, even as non-tax revenue fell 3%.
Source #TOI
