Budget 2018: UP's share in central taxes up 15% to Rs 1.40 trillion in FY19

Uttar Pradesh's share in the divisible pool of central taxes, including the Goods and Services Tax (GST) is estimated to swell by 15% to about Rs 1.40 trillion during 2018-19.

The increase of 15% is higher compared to the rise of a little under 10% projected during the current fiscal 2017-18, when UP is likely to get about Rs 1.21 trillion under the tax devolution formula. The share in the central tax kitty comprises various heads, including GST, Corporation tax and other central taxes.

The share of Central GST in the projected UP’s share of the central taxes is over 30% at over Rs 450 billion.

Over the past few years, UP’s share in the central taxes has been witnessing wide fluctuations with regard to successive increases. In 2015-16, the kitty burgeoned by almost 36% or about Rs 243 billion to Rs 909 billion. During 2014-15, the central tax share kitty posted a miniscule increase of about 6% to Rs 666 billion compared to Rs 627 billion. 

A senior UP finance department official told Business Standard UP’s share in central taxes has been growing incrementally and would be much better goring forward due to GST.

“Since, UP is basically a consumer state, the state was always projected to immensely benefit under the new tax regime of GST,” he added. UP is primarily a consumer state with the majority of goods imported from outside its borders, therefore it is projected to be a net tax gainer, since GST is a destination based taxation system.

Meanwhile, the additional tax kitty would provide the much needed legroom to the Yogi Adityanath government to meet additional expenses arising out of fulfilling its pre-poll promises and other development expenditure in the next fiscal.

In the first few months of the implementation of GST in July 2017, the state GST kitty had witnessed downfall due to preliminary teething troubles. However, the tax collection is slowly getting better. On May 16, 2017, the state assembly had unanimously passed the UP GST Bill 2017 a day after it was tabled in the legislature by Adityanath government.

Meanwhile, the UP Budget Session would start from February 8 and the Adityanath government would present its second Annual Budget. This fiscal, the state could not do much beyond the flagship crop loan waiver scheme of Rs 360 billion due to funds crunch.

Sl No	Fiscal	UP’s share in Central taxes (approx)	Increase (Rs)	%age increase
1	2014-15	Rs 666.20 billion	Rs 38.45 billion	6.12
2	2015-16	Rs 909.70 billion	Rs 243.50 billion	36.00
3	2016-17	Rs 1.10 trillion	Rs 195.30 billion	21.46%
4	2017-18	Rs 1.21 trillion	Rs 109.00 billion	9.86
5	2018-19	Rs 1.40 trillion	Rs 186.00 billion	15.32