Indian states' revenue growth slows in 2025-26 due to lower non-tax revenue and government transfers.

Indian states face slower revenue growth in 2025-26, primarily due to weaker non-tax revenue and lower government transfers. According to an ICICI Bank report, revenue growth is expected to decrease from 16% in 2024-25 to 13% in 2025-26, with non-tax revenue growth dropping from 23% to 12%. Central transfers are projected to rise only 10%, down from 18% the previous year. Despite stable tax revenue, other income streams' underperformance may affect states' fiscal health.