Indian states can add at least one ₹72,000 crore to her kitten in the current fiscal year (FY 2022) by implementing energy sector and local government reform as recommended by the 15th Finance Commission for 2021-26, the SBI Ecowrap report said Friday.
The SBI Ecowrap report said that Indian states are facing a potential loss of sales of about ₹1.05 lakh crore in FY22 budget estimates due to lower GST collection and oil consumption taxes.
However, if countries could implement energy and local government reforms, a potential amount of ₹According to the report, 1.77 lakh crores could still be available to them.
“This implies that Indian states will start FY22 with an additional ₹72,000 thousand crore in her kitten, "it added.
The 15th Finance Commission for 2021-26 has recommended overall ₹4.36 lakh crore for local bodies. A total of ₹2.36 lakh crore are earmarked for rural local bodies, ₹1.21 lakh crore for urban local bodies.
in addition, ₹70,051 crore is for health grants (unconditional) by local governments for physical infrastructure and diagnostic facilities at the local level. in addition, ₹8,000 crore are performance-based grants for the incubation of new cities and ₹450 crore are intended for joint municipal services.
For disaster management a sum of ₹1.6 lakh crore was recommended for FY22-26, of which the center's share is ₹1.2 lakh crore and the proportion of states is ₹37,552 million euros.
However, the Finance Commission has recommended certain requirements that local authorities must meet in order to receive grants. One of the most important conditions is that the local authorities make both preliminary and verified online accounts publicly available.
Only in the context of scholarships ₹1.54 lakh crore is unconditional and the rest ₹67,105 crore for local corporations are conditional.
In addition to reforms to the energy sector and local government, the report also highlighted the importance of oil revenues and goods and services tax (SGST) in improving state government revenues in FY22.
The SBI Ecowrap has forecast the combined GST growth rate of 19% for this year over FY21 and 11% over FY20 through some math. According to the report, “the total revenue for the 29 states is including taxes ₹7.59 crore (decrease: ₹1.03 lakh crore) ".
In addition, oil revenues from excise duties may overlap ₹1 lakh crore-mark in the current financial year.
Citing the Petroleum Planning & Analysis Cell (PPAC) forecast, the report said gasoline and diesel consumption growth this year could be 12.2% and 15.1%, respectively.
"Center excise duties on the unbranded category of these products ₹32.9 and ₹31.8 per liter. If this is multiplied by the forecast consumption, the result is a total turnover of ₹4.67 lakh core while the center has only budgeted ₹3.35 lakh crore ".
As a result, oil revenues will be at the current excise tax rate ₹The SBI report estimates 1.32 lakh crore.
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