Odisha expecting GST compensation grants of Rs 6,200 cr for FY21

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Odisha has estimated goods & services tax (GST) compensation grants of Rs 6200 crore for 2020-21, an increase of 2.9 percent over the revised estimate (RE) of FY20. In the current financial year, compensation grants are estimated to rise by Rs 1160 crore from Rs 4867 crore at the budgeted stage to Rs 6027 crore at the revised stage. “An increase in the compensation requirement of the state reflects a further decrease in the GST revenue growth rate as compared to the 14 per cent growth proposed under the Act”, Delhi-based non-profit organisation PRS Legislative Research noted in its analysis of Odisha Budget for 2020-21. State GST is the single largest component of Odisha’s tax revenue.

It is expected to generate Rs 15469 crore in the next fiscal. This marks an increase of 12.9 per cent from the RE of 2019-20. In 2020-21, Odisha is expected to mop up Rs 8750 crore from sales tax and Value Added Tax (VAT) on petroleum products, indicating a hike of 9.4 percent over the RE of 2019-20. State excise duty is slated to contribute Rs 5250 crore, marking 14.1 per cent increase over the RE of FY20. The total revenue receipts for 2020-21 are estimated at Rs 1.24 trillion, an increase of 11.2 per cent over the RE of 2019-20. Of this, Rs 56,000 crore (or 45 percent of the revenue receipts) will be raised through state’s own resources and Rs 68,300 crore (55 per cent of the revenue receipts) will be in the form of central transfers or the state’s share in central taxes and grants-in-aid from the central government.

In 2020-21, receipts from the state’s share in central taxes are estimated to rise by 19.2 per cent over the 2019-20 RE. However, in 2019-20, devolution is estimated to decrease by 22.3 percent to Rs 30,453 crore as compared to the budgeted estimate (BE). “This may be due to a 19 per cent cut in the union budget for devolution to states, from Rs 8.09 lakh crore at the budgeted stage to Rs 6.56 lakh crore at the revised stage”, the report by PRS Legislative noted. Odisha is expected to generate Rs 17,650 crore through non-tax sources in 2020-21.

This is 21.7% higher than the revised estimates of 2019-20. Of this, Rs 12,500 crore (71 percent) will be received from non-ferrous mining and metallurgical industries. Odisha’s total tax revenue is estimated at Rs 38,350 crore in 2020-21 (31 per cent of the revenue receipts). This is 14.3 per cent higher than the revised estimate for 2019-20. The own tax to GSDP ratio is targeted at 6 percent in 2020-21, which is the same as the revised estimate of 6 percent in 2019-20. This implies that growth in the collection of own taxes is at par with the growth rate of the state economy.

Read More at: https://www.business-standard.com/article/economy-policy/odisha-expecting-gst-compensation-grants-of-rs-6-200-cr-for-fy21-120022400351_1.html