Gujarat has recorded the highest trend growth rate of 8.2 per cent of per capita income (PCI) during 2004-2013 amid high income states, according to a recently concluded study by apex industry body ASSOCHAM.

“Gujarat has taken a massive leap forward in this regard from annual PCI trend growth rate of 2.9 per cent that had remained constant during the decade long periods of 1980-93 and 1993-2004,” highlighted a study titled “States’ Finances Convergence-2,” conducted by The Associated Chambers of Commerce and Industry of India (Assocham).

Amid other high income states, Maharashtra and Haryana have closely followed Gujarat in this respect clocking annual PCI trend growth rate of 7.2 per cent and 6.9 per cent, respectively, the study by The Assocham Economic Research Bureau (AERB) said on Wednesday.

With annual PCI trend growth rate of six per cent and 4.8 per cent respectively, Kerala and Punjab have also remained ahead in this aspect.

Among the low income states, Bihar remained on top with an annual PCI trend growth rate which had increased from 1.1 per cent during 1980-93 and 1.7 per cent during 1993-2004 to 7.2 per cent during 2004-13.

With a median value of 12.02 per cent of nominal gross domestic product (GDP) between FY 2006 and FY 2012, Gujarat has emerged as a leader amid high income states, while national median value of nominal GDP remained at 8.37 per cent.

However, amid high income states Gujarat has ranked second only to Maharashtra in terms of the states’ own tax revenue, share in Central taxes, states’ own non-tax revenue and grants from the Centre.

Clocking a growth rate of over 36 per cent, Gujarat’s own tax revenue grew from over Rs 44,250 crore to over Rs 60,200 crore during FY 2011-12 and FY 2013-14 while the state’s share in Central taxes grew at over five per cent from over Rs 7,700 crore to about Rs 8,200 crore.

Besides, growing at about 21 per cent and about 55 per cent, Gujarat’s own non-tax revenue and grants from the Centre have respectively grown from over Rs 5,200 crore to over Rs 6,300 crore and from over Rs 5,800 crore to over Rs 9,000 crore, said D S Rawat, Secretary-General, Assocham.

While amid low income states, Bihar has ranked on top with states own tax and non-tax revenues clocking a growth rate of over 66 per cent and about 284 per cent i.e. from over Rs 12,600 crore to over Rs 20,900 crore and from about Rs 890 crore to over Rs 3,400 crore respectively during 2011-12 and 2013-14.

The emerging picture of growth of states shows that while the high-income states in the country continue to grow, the low-income states are also catching up with them. “This augurs well for immediate future as India’s growth story pumped up by young middle class aspirations and political leadership that has to respond to it in democratic set up, enters a further phase of take off.”

The study suggested that states must undertake to raise resources locally especially through non-tax route and rationalize revenue expenditures to generate more revenue surpluses.Besides, in order to improve Centre-State relations, the governments must enter into a compact setting forth certain well defined objectives.

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