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SBI Research in its latest report has said that if there is no third wave of Covid-19 pandemic, the fiscal position of the Centre and the states will be much better than budgeted for FY22 and the states may garner Rs 60,000 crore more in tax collections at Rs 8.27 lakh crore this fiscal year than they have budgeted. The report bases its optimism on GST collection so far this fiscal, which has been the best ever in spite of the fact that the two months bore the maximum brunt of the second wave -- with April setting a record Rs 1.41 lakh crore and May collection a tad low at Rs 1.03 lakh crore.

The report also said overall government finances do not look overstretched as GST collections have continued to maintain pace so far and the additional fiscal impact arising from free vaccination and more food supplies will only be around Rs 28,512 crore.  The states, even amidst the lockdowns, have budgeted for a 31 per cent GST revenue growth this fiscal at Rs 6,38,007 crore, according to the SBI Research. In FY19, the same had jumped 46 per cent, on base effect to Rs 4,90,136 crore from Rs 3,34,849 crore, which in FY20 declined 0.4 per cent to Rs 4,88,230 crore and was flat in FY21 at Rs 4,88,015 crore.

According to the report, for FY22, the states have budgeted for a compensation cess of Rs 1.28 lakh crore and combining their estimates for SGST and cess, the states are sticking more or less to the 14 per cent revenue growth rate projections. But the Centre has budgeted only Rs 1 lakh crore for FY22 as GST compensation cess and has said it will borrow an additional Rs 1.58 lakh crore to pay the states and has pegged the total compensation for the states this fiscal at Rs 2.7 lakh crore.