States surge ahead

While the Centre's tax revenue growth has decelerated, the states have put up a better performance

Celebrations over continued robust growth in the Union government’s tax collections have understandably died down. Importantly, such a mood change has coincided with the emergence of quite a few puzzling trends in tax collections, which perhaps indicate the likely trajectory of government finances during the remaining quarters of the current financial year. In contrast, however, the states are showing continued buoyancy in their tax revenues, and their expenditure mix also seems to have got better.

But let us first assess the sharp decline in the Union government’s tax growth rate. After the heady days of the Centre’s gross tax collections growing