BHUBANESWAR: Odisha is expected to get Rs 10,222.56 crore more out of the divisible pool of central taxes this fiscal as the Centre has marginally increased the devolution of taxes to states in 2024-25.
Sources said the total revenue devolution to state governments has been enhanced from 30.39 per cent of gross tax revenue (GTR) in 2023-24 to 32.48 per cent in 2024-25 budget estimate (BE) to support state finances and spur economic development.
According to the Union Budget, Odisha’s share in shared tax is budgeted at Rs 56,473.74 crore in 2024-25 as compared to Rs 46, 251.18 crore in 2023-24. The devolution to the state has increased from 1.38 per cent of GTR in 2023-24 to 1.47 per cent in 2024-25 which amounts to Rs 10, 222.56 crore.
Odisha’s share in total tax devolution of Rs 12,47,211 crore stood at 4.528 pc in 2024-25. Of the estimated Rs 56,473.74 crore the state is expected to receive during the fiscal, corporation tax will comprise Rs 16,957.92 crore, income-tax Rs 19,530.63 crore, central GST Rs 16,871.63 crore, customs Rs 2,493.32 crore, union excise duty Rs 525.56 crore, service tax Rs 1.86 crore and other duties and taxes Rs 92.82 crore.
Barring the Covid pandemic year, the share of tax devolution to the state has increased over the years. The centre released Rs 30,453.25 crore (in 2019-20) which rose to Rs 38,144.79 crore (2021-22), Rs 42,989.33 crore (2022-23), Rs 51,143.68 crore (2023-24) and Rs 16,601 crore (till July in 2024-25) as part of tax devolution. In 2020-21, it received Rs 27,542.67 crore which was a dip due to the pandemic.
In terms of total central transfers that include state’s share for centrally sponsored schemes, finance commission grant and other transfer/grants, Odisha’s receipts stood at Rs 54,605.37 crore in 2019-20 which rose to Rs 72,155.18 crore in 2023-24 year-on-year except for a Covid dip in 2020-21 when it pegged at Rs 50,611.02 crore.
Economists, however, said the estimated tax devolution in 2024-25 is less as compared to the 15th Finance Commission’s recommendation of 41 pc. Earlier, the 14th Finance Commission had recommended the devolution of 42 pc of central taxes to states. The share to states was dropped by 1 per cent after Jammu and Kashmir was carved out into two union territories.
“Since the cess and surcharges comprises 10.17 pc of GTR in 2024-25 budget estimate against 12.13 pc in 2023-24, the decrease in this provision will lead to an increase in the size of the divisible pool and, therefore, the states’ shares in central taxes,” they pointed out.
Funds galore
Total devolution to state govts has been enhanced to 32.48 pc in 2024-25
Odisha’s share in shared tax budgeted at over Rs 56K cr
Odisha’s share in total tax devolution stood at 4.5 pc