Tax mop-up doubles in the first quarter but transfers to states shrink

Devolution accounts for just 22% of gross tax revenue in the first quarter

Though the Centre’s gross tax revenues nearly doubled in the first quarter of financial year 2021-22 (Q1FY22) compared to last year, transfers to states in the form of devolution declined by 12.3 per cent, which experts say will impact states’ spending, especially as they battle economic uncertainty due to the pandemic. 

The Centre’s gross tax revenue in Q1 doubled to Rs 5.31 trillion, compared with Rs 2.69 trillion in the corresponding period last year. It devolved Rs 1.17 trillion to the states, compared with Rs 1.37 trillion last year, when the devolution accounted for about half of the gross collected. This