New Delhi, Feb. 2 -- Despite good tax transfer from the Centre to the states, the financial health of the states is struggling highlights a report by State bank of India.

The report noted a general decline in states' fiscal stability, with some exceptions. It also points out regional imbalances arising from differences in states' capacity to manage their local economies.

The report comes amid an ongoing debate over the transfer of financial resources from the Centre to the states. According to the report, a significant 59.9 per cent of the Centre's gross tax revenue is transferred to the states.

This transfer includes 33.3 per cent from the divisible pool of central taxes, 5.4 per cent under various schemes such as grants and loans for...