Turbulence ahead for fiscal federalism
2 years, 7 months ago

Turbulence ahead for fiscal federalism

Hindustan Times  

June is a watershed moment in the history of fiscal federalism in India. It marks the end of the five-year period for which state governments were entitled to a guaranteed 14% growth in their revenues after the implementation of the Goods and Services Tax. Some states could suffer larger losses, as GST is a consumption-centric tax and penalises states which are hubs of manufacturing activities. Low nominal growth driven headwinds to revenue collections were a major problem in the pre-pandemic period. As long as the states were guaranteed assured revenue growth, they were always arguing for tax cuts in the GST Council.

State Gst Fiscal Federalism  states  pressures  gst  turbulence  period  revenue  state  end  tax  fiscal  growth  federalism  ahead  tailwinds

History of this topic

Rethink the emerging dynamics of India’s fiscal federalism
1 year, 4 months ago

Rethink the emerging dynamics of India’s fiscal federalism

The Hindu  

A ‘holding together federation’ with a built-in unitary bias, the Indian Constitution was the contextual product of centrifugal forces and fissiparous tendencies in the run-up to Independence. The paradigm shift from a planned economy to a market-mediated economic system, the transformation of a two-tier federation into a multi-tier fiscal system following the 73rd and 74th Constitutional Amendments, the abolition of …

Sanjeev Ahluwalia | A bottom-up view of the annual Budget
3 years, 11 months ago

Sanjeev Ahluwalia | A bottom-up view of the annual Budget

Deccan Chronicle  

Despite the hoopla around the Union government’s Budget, for citizens, allocations in their state budgets matter more. The avoided cost of pancaked sales tax on goods sold across state borders and the ease of movement — most recently via e-tax invoices — will reduce tax leakage and fraud, boost tax revenues and benefit both the Union and the states. The …

14% rise in revenues of 20 states after GST: Arun Jaitley
5 years, 6 months ago

14% rise in revenues of 20 states after GST: Arun Jaitley

Live Mint  

As the Goods and Services Tax marks its second anniversary on Monday, former Finance Minister Arun Jaitley said that 20 states have independently reported 14 per cent rise in their revenues post the implementation of the unified tax regime. Already after the second year, twenty states are independently showing more than a 14 per cent increase in their revenues and …

GST will not reduce deficits of state governments significantly: S&P Global Ratings report
5 years, 8 months ago

GST will not reduce deficits of state governments significantly: S&P Global Ratings report

Firstpost  

Singapore: Goods and Services Tax regime in India is not likely to reduce the deficits of state governments significantly, amid large and growing expenditure mandates for the social sector as well as capital spending, says a report. According to S&P Global Ratings the institutional framework for Indian states is evolving, but there are structural deficits due to persistent revenue expenditure …

Do government’s marginal GST cuts mean there is hope for fiscal discipline?
6 years ago

Do government’s marginal GST cuts mean there is hope for fiscal discipline?

Live Mint  

Mumbai: When Prime Minister Narendra Modi said last week that more than 99% of product categories could be brought under a goods and services tax rate of 18% or lower, fears of fiscal indiscipline rose among investors. After all, government expenditure has grown at a faster rate than revenue so far this year, implying that the absolute fiscal deficit target …

Petrol, diesel excise cut: Fiscal stress staring at India; can Centre, states have the guts to tackle it?
6 years, 3 months ago

Petrol, diesel excise cut: Fiscal stress staring at India; can Centre, states have the guts to tackle it?

Firstpost  

Post the petrol, diesel, excise cut, how the Centre manages to stick to the fiscal deficit target of 3.3 percent is going to be interesting to watch Just about a month earlier, the government was firm about not cutting excise duty on petrol and diesel even as global crude prices rose almost every day. In fact, some would argue that …

GST Council discusses revenue shortfall, sets up seven-member ministerial panel on 'calamity tax'
6 years, 3 months ago

GST Council discusses revenue shortfall, sets up seven-member ministerial panel on 'calamity tax'

Firstpost  

The finance ministry has targeted monthly GST collections to be Rs 1 lakh crore for this fiscal, but the actual mop up has been less with the sole exception of April New Delhi: The GST Council Friday set up a seven-member ministerial panel to examine the legality of imposing a new tax on certain goods and services to raise resources …

Inflation under control, Govt confident of achieving 3.3% fiscal deficit target: Arun Jaitley
6 years, 3 months ago

Inflation under control, Govt confident of achieving 3.3% fiscal deficit target: Arun Jaitley

India TV News  

Union Finance Minister Arun Jaitley on Saturday said inflation was under control, and expressed confidence for achieving a fiscal deficit target of 3.3 per cent. A day after steps to contain the widening current account deficit and check fall of the rupee were announced, Prime Minister Narendra Modi on Saturday continued his two-day review of the economy as he took …

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