New Delhi [India], August 9 : The combined fiscal deficit of 24 Indian states, representing nearly 92 per cent of the country's GDP, reached Rs 1.5 trillion or 1.8 per cent of GSDP in the first quarter of 2025-26 - April-June, according to a report by ICICI Bank Global Markets.
The ICICI Bank Global Markets analysis revealed that revenue receipts of these states grew 6.5 per cent year-on-year during the report, rebounding sharply from a 0.3 per cent decline in the same period last year.
The improvement was driven largely by stronger Own Tax Revenue (OTR), with all major components, except excise duty, registering higher growth.
Post-settlement State GST (SGST) collections rose 11.4 per cent year-on-year, while stamp duty, land revenue, and sales tax all posted healthy gains, benefiting from a low base effect.
On the expenditure side, revenue expenditure remained broadly flat, but capital expenditure (capex) maintained its strong momentum, surging 28 per cent in the first quarter of 2025-26, after a steep 22 per cent contraction in the same quarter last fiscal, the ICICI Bank Global Markets report asserted.
This uptick in capex pushed overall expenditure growth to nearly double the pace seen in the same period last year.
June 2025 data underscored the base effect, with total receipts rising 16.8 per cent year-on-year and revenue receipts increasing 15.6 per cent year-on-year.
Tax revenue climbed 14.3 per cent, led by a 28 per cent jump in State OTR. SGST collections spiked 37.5 per cent year-on-year, aided by post-IGST and input tax credit settlements in earlier months.
While stamp duty growth moderated to 6.2 per cent year-on-year, sales tax and other taxes recorded strong gains of 36 per cent and 37 per cent, respectively. State excise duty and land revenue posted more modest increases 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 expanding nearly 50 per cent to Rs 332 billion. Capital receipts increased to Rs 31 billion, even as non-tax revenue saw a 3 per cent year-on-year contraction.