Bhubaneswar: Odisha leads Indian states in non-tax revenue generation, contributing 49% to the state’s revenue, according to the Economic Survey 2024-25 presented in Parliament on Friday.
“Odisha exhibited the highest share of non-tax revenue in ORR (own revenue receipts) at 49 per cent,” the report stated. ORR includes all revenue generated by the state excluding central transfers and comprises own tax revenue from taxes such as VAT, excise duty, stamp duty, motor vehicle tax, and non-tax revenue. The non-tax revenue comes from sources other than taxes, such as mining royalties, interest receipts, fees, fines, and income from state-owned enterprises.
Mitali Chinara, a professor of economics at Utkal University, said a higher share of non-tax revenue for Odisha gives it greater fiscal space for developmental activities. “However, since a large part of this comes from the mining sector, it also increases the state’s vulnerability to several factors beyond the control of the state and raises environmental concerns,” Chinara said.
Unlike states that rely heavily on central govt transfers like GST compensation and finance commission grants, Odisha’s strong non-tax revenue gives it more financial independence. It allows the state to fund infrastructure, welfare schemes and development projects without waiting for central allocations.
According to Odisha’s last budget statement, the state’s own non-tax revenue is estimated at Rs 52,499 crore for the year 2023-24 and Rs 58,000 crore in 2024-25, a growth of about 10.48% over the previous fiscal. The non-tax revenue is projected to register a growth of 12.27% and 8.03% during 2025-26 and 2026-27, respectively.
The state’s total revenue receipts are estimated at Rs 2,11,000 crore for 2024-25. The state’s own tax revenue for 2024-25 has been estimated at Rs 60,000 crore with growth of about 13.75% over 2023-24.
According to the survey, Odisha is the only state which maintains both revenue and fiscal surpluses, demonstrating its robust financial management and economic stability.
The survey also highlighted Odisha’s strong industrial performance, though noting its limited presence in the service sector. “States like Chhattisgarh and Odisha perform reasonably well in the industrial sector, while they have low service sector presence. This indicates that these states will stand to gain largely by accelerating their industrialisation and industrial productivity, which will strengthen their service sectors through the ongoing trends in greater ‘servicification’ of industries,” the report said.