Archive · 10 Dec 2025
Sluggish Own Tax Revenue Growth in Large States
The own tax revenue (OTR) of many large states in India is growing slowly.
Gujarat had the highest growth at 13%, while states like Tamil Nadu, Uttar Pradesh, and Andhra Pradesh had very low growth, below 5%.
Only four out of the ten largest states have collected more than half of their expected tax revenue for the year.
Experts say this is because the economy isn't growing as fast as before, and prices aren't rising much.
Since GST is a big part of their tax money, this could make it harder for states to manage their finances.
Some states expected big increases but didn't get them, which might mean they need to spend less or find other ways to get more money.
Gujarat's OTR grew by 13% in April–October 2025, the highest among the 10 largest states by GDP.
States like Tamil Nadu, Uttar Pradesh, Andhra Pradesh, and Madhya Pradesh had OTR growth below 5%.
Only four of the ten large states have collected more than half of their budgeted OTR by October 2025.
Slower nominal GDP growth and low inflation are key factors for the sluggish tax revenue growth.
GST makes up about 45% of states' OTR, and its revenue has averaged 2.6% of GDP, below pre-GST levels.
- Who
- Large states in India, including Gujarat, Tamil Nadu, Uttar Pradesh, Andhra Pradesh, and Madhya Pradesh
- What
- Sluggish growth in own tax revenue (OTR) for the fiscal year 2025-26
- When
- April to October 2025
- Where
- India, specifically the largest states by GDP
- Why
- Factors include slower nominal GDP growth, low inflation, and GST rate reductions
- Gujarat's OTR Growth
- 13%
- Tamil Nadu's OTR Growth
- 4.5%
- Uttar Pradesh's OTR Growth
- 4.6%
- Andhra Pradesh's OTR Growth
- 3.4%
- Madhya Pradesh's OTR Growth
- Below 5%
- GST's Share in OTR
- 45%
- States Above 50% of Budgeted OTR
- 4 out of 10
- GST Revenue as % of GDP
- 2.6%