The mixed fiscal deficit of 24 Indian states, representing practically 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 response to a report by ICICI Financial institution World Markets.
The ICICI Financial institution World Markets evaluation revealed that income receipts of those states grew 6.5 per cent year-on-year throughout 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 parts, besides excise obligation, registering greater progress.
Put up-settlement State GST (SGST) collections rose 11.4 per cent year-on-year, whereas stamp obligation, land income, and gross sales tax all posted wholesome positive aspects, 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 World Markets report asserted.
This uptick in capex pushed total expenditure progress to almost double the tempo seen in the identical interval final yr.
June 2025 knowledge underscored the bottom impact, with complete receipts rising 16.8 per cent year-on-year and income receipts growing 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 obligation progress moderated to six.2 per cent year-on-year, gross sales tax and different taxes recorded sturdy positive aspects of 36 per cent and 37 per cent, respectively. State excise obligation 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 practically 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.
