Unfortunately, the financial capacity of the States is structurally being weakened. The ability of the States to expand revenue has been constrained since the Goods and Services Tax (GST) regime was adopted. This is an undeniable and substantial reduction of the fiscal resource capacity of the States. GST cesses are levied on luxury or sin goods on top of the GST. Of the nearly ₹3 lakh crore GST shortfall to the States, the Centre will only compensate ₹1.8 lakh crore.

Source: The Hindu November 04, 2020 18:45 UTC