-
Jun 21, 2018
-
July-March GST revenues: States ‘shortfall’ not true picture
At first glance, the goods and services tax’s (GST) revenue buoyancy seems unproven yet, given that 31 of 34 states/UTs in the country reported a ‘revenue shortfall’ during the July 2017-March 2018 period — among the larger states, Bihar’s deficit was 38% and Madhya Pradesh’s 26% — and received compensation. But the picture is actually not all that grim as most of these shortfalls are against the so-called ‘protected revenue’; when compared with the relevant tax revenue growth rates of the states during the pre-GST period, the new tax, despite its teething troubles during the period, has already shown its potential to boost revenue. The five-year full-compensation mechanism under the GST ensures that the Centre will make good any shortfall in the states’ GST revenue from what a 14% annual growth (over FY16 base) would have yielded them.
Source -
https://www.financialexpress.com
|