The State’s growth momentum is expected to sustain in 2024-25 with the Gross State Domestic Product (GSDP) projected to grow at 11.68% and the State’s own tax revenue at 10.18% over the 2023-24 revised estimates.
The GSDP growth will be on account of the “sustained growth momentum in the economy,” according to the Medium Term Fiscal Policy and Strategy Statement, tabled in the State Assembly on Monday along with the 2024-25 State Budget.
The share of Central taxes in 2024-25 is expected to grow at 12.20% riding on a higher growth in direct tax collection and Goods and Services Tax mop-up by the Union government.
At the same time, revenue expenditure is poised to grow at 9.96%, given the emphasis on health and education, the policy document noted.
The share of Central taxes is projected to grow at 22% and 20% in 2025-26 and 2026-27 respectively. “Grant-in-aid is estimated to taper off in the forward estimates period due to the discontinuation of RD grant,” the policy noted.
Despite “robust growth” in Own tax revenues, the State is facing liquidity crunch on account of a “vertical fiscal imbalance and arbitrary cut” in borrowing limit, Finance Minister K.N. Balagopal noted.
