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| States like Karnataka, Tamil Nadu and Maharashtra, as well as some smaller states, expect sales tax collections to grow more than 15 per cent over the previous fiscal. |
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| However, their revenue performance could suffer on account of a possible shortfall in Central devolution. |
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| The likely shortfall in Central excise and personal income tax collections was definitely a cause for worry, Planning Commission officials said. While the Budget estimates put the expected growth of excise tax collection at 12 per cent, the actuals till September show a growth of only about 9 per cent. |
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| Early indications in this fiscal are that sales tax collections in a number of states are buoyant. |
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| Given the fact that industry was doing well, it was reasonable to expect that this would be the condition across all states in the country, Planning Commission officials added. Additionally, with the government having capped the level of borrowings allowed to states, fiscal profligacy would be curtailed, they added. |
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| However, if the Centre faces a shortfall in revenue collections, lower devolution will affect the revenue position of states, pushing up their fiscal deficits. |
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| Even in 2002-03, the revised estimates show a shortfall of about Rs 5,000 crore in Central devolution to states as compared to the Budget estimates. This alone pushed up the gross fiscal deficit of states as a percentage of gross domestic product (GDP) by 0.2 per cent, officials pointed out. |
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| In addition, states were allowed SLR borrowings to meet non-Plan expenditure and the net increase in lending to states was to the tune of Rs 7,000 crore or 0.3 per cent of the GDP, they said. The net result of these factors was that the revised estimates figure for the gross fiscal deficit of states as a percentage of GDP was 4.7 per cent as against 4.0 per cent in the Budget estimates. |
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| As a percentage of GDP, the level of the gross fiscal deficit of states in 2002-03 was the same as in 1999-2000, and worse than the 2000-01 and 2001-02 figures which were 4.3 per cent and 4.2 per cent, respectively. The Budget estimates for the current year is also 4.0 per cent of the GDP. |
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