State Government Finances - Retention Of Monthly Tax Devolution At Existing Levels Impact: ICRA
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ICRA Research Report
The Central tax devolution (CTD) forms a substantial ~25% of the states’ combined revenue receipts, although its share varies across various states.
The monthly pattern of tax devolution used to be fairly stable in earlier years imparting predictability to the cash flows of the state governments.
With the Covid-19 pandemic affecting the Government of India’s) tax inflows in FY2021, this monthly pattern of devolution underwent some change.
For FY2022, the growth of CTD embedded in the GoI’s FY-2022 budget estimates (Rs 6.7 trillion) relative to the FY2021 provisional actuals (Rs 5.9 trillion) is moderate at 11.9%.
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