New Delhi, Jul 30 (KNN) Maharashtra, Gujarat and Haryana have recorded highest growth rate in terms of per capita income (PCI) during 2004-2013 among high income states.

“These three states amid high-income states have taken a massive leap forward from an annual PCI trend growth rate of 2.9 per cent, 2.8 per cent and 3.7 per cent during decade of 1993-2004 to 8.2 per cent, 7.2 per cent and 6.9 per cent,” said the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

According to the study, States’ Finances Convergence-2 conducted by the chamber, Maharashtra has ranked on top in terms of states’ own tax revenue, share in central taxes, states’ own non-tax revenue and grants from the centre, while Gujarat is ranked second in this regard.

The state is in lead in terms of fiscal management amid high income states as it has witnessed a significant surge in states own tax revenue which has increased from over Rs 87,600 crore in FY 2011-12 to over Rs 1 lakh crore in FY 2013-14 thereby clocking a growth rate of over 22 per cent.

Maharashtra’s share in central taxes has also increased at a growth rate of about 36 per cent thereby increasing from over Rs 13,300 crore to over Rs 18,100 crore during the aforesaid period.

With a median value of 12.02 per cent of nominal gross domestic product (GDP) between FY 2006 and FY 2012, Gujarat has emerged as a leader amid high income states, while national median value of nominal GDP remained at 8.37 per cent, said the study.

Clocking a growth rate of over 36 per cent, Gujarat’s own tax revenue grew from over Rs 44,250 crore to over Rs 60,200 crore during FY 2011-12 and FY 2013-14 while the state’s share in Central taxes grew at over five per cent from over Rs 7,700 crore to about Rs 8,200 crore.

Amid other high income states, Tamil Nadu has ranked second with a median value of 11.74 per cent followed by Maharashtra (10.78 per cent), Andhra Pradesh (10.10 per cent) and Haryana (9.2 per cent).

With annual PCI trend growth rate of six per cent and 4.8 per cent respectively, Kerala and Punjab have also remained ahead in this aspect, ASSOCHAM Economic Research Bureau (AERB).

In case of low income states, Bihar has remained on top with an annual PCI trend growth rate which had increased from 1.1 per cent during 1980-93 and 1.7 per cent during 1993-2004 to 7.2 per cent during 2004-13.

“The wide introduction of value added tax (VAT) at state-level has significantly raised states’ revenue from their own taxes despite many glitches at an early stage and they are now converging towards growth rate of high income states,” said ASSOCHAM secretary general DS Rawat. 

The study said the state has ranked on top with states own tax and non-tax revenues clocking a growth rate of over 66 per cent and about 284 per cent i.e. from over Rs 12,600 crore to over Rs 20,900 crore and from about Rs 890 crore to over Rs 3,400 crore respectively during 2011-12 and 2013-14.

The emerging picture of growth of states shows that while the high-income states in the country continue to grow, the low-income states are also catching up with them, it said.

ASSOCHAM suggested that implementation of both the Direct Taxes Code (DTC) and a single Goods and Services Tax (GST) would act as an adrenaline to entire economy by boosting the total pie available for sharing between the Centre and the states.

“The new government must create an environment where states are co-operating with it to implement a single national DTC and GST to replace the different and divergent state level taxes,” it said. (KNN/ST)