Western, southern states' share in direct tax collections rose further in FY24

South and west contribute more to direct taxes

The share of western and southern states in direct tax collections has increased further over the past six years, as revenue nearly doubled, a Moneycontrol analysis of data released by the Central Board of Direct Taxes (CBDT) has found.

The country's north, central and eastern states have fallen further behind, with their share falling to 25.6 percent in FY24 from 30.5 percent before the Covid outbreak.

The share of western states has grown to 45.3 percent from 43.8 percent and that of the states in the south has risen to 25.3 percent from 23.6 percent.

The concentration has moved little from other states, indicating that prosperity has not moved beyond certain areas. Maharashtra accounts for 39 percent of the country’s direct tax collections and Karnataka 11.9 percent.

These states' share in the country’s tax collections has also grown. Maharashtra's share was 37.4 percent in FY19 and Karnataka's to 10.5 percent.

In contrast, Delhi, which had the second-highest share of tax collections in FY19 at 14.6 percent, has now dropped to 10.4 percent. Tax collections rose at a compounded annual growth rate of 4.1 percent compared with the national average of 11.5 percent.

Bihar and Madhya Pradesh’s situation has worsened, with only 1.4 and 0.4 percent increase in collections annually over the past six years.

Andhra Pradesh’s share in direct tax collections shrunk by 10.8 percent per annum during this period, while Telangana’s rose by 50.7 percent per annum.