Indian independent and professional investment information and credit rating agency ICRA expects a large GST compensation requirement of Rs 2.65 lakh crore for the current year. The agency Projected the FY22 state GST (SGST) collections of all states  to beat Rs 6.1 lakh crore,

It said actual fiscal outcomes will vary considerably across the states, depending on the impact of infections-restrictions-vaccinations on regional economic activity. According to Chief Economist Aditi Nayar, it is said that after a sharp fiscal deterioration in FY21, the Budget estimates for FY22 of 24 state governments had indicated a decline in their aggregate revenue deficit to Rs 1.2 lakh crore - similar to the pre-Covid-19 level of Rs 1.3 lakh crore in FY20.

This benefitted from the considerable 24.7 percent increase forecast in their revenue receipts in FY22 compared to the 12.4 percent growth in their revenue expenditure. The anticipated shrinking of revenue deficit allowed states to plan for a substantial 34.1 percent expansion in capital expenditure and net lending, while still attempting a modest correction in fiscal deficit to Rs 7.6 lakh crore in FY22 from Rs 8.7 lakh crore in revised estimates for FY21. ICRA expects the second wave of Covid-19 infections to curtail consumption of discretionary items and contact-intensive services, thereby weighing upon states own tax revenue in FY22.

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