The 14th Finance Commission report was accepted in 2015 with the promise that it would devolve more finances to the States. As part of the process, States would have new responsibilities, especially in the social sector. Two years later, the introduction of the Goods and Services Tax (GST) regime was also justified as a grand bargain that would eventually leave all States better off.
In reality, tax devolution to States has been consistently below 14th Finance Commission projections. One reason for this has been the economic slowdown, caused primarily by the Central government, and lower-than-expected GST collections. The shortfall in GST collection for 2018-2019 was 22% when compared to projections. Payments have been delayed as well. For example, Centre owed States about 35,000 crore as GST compensation for December 2019 and January 2020, which was only paid in June 2020 after a delay of more than five months.
https://www.thehindu.com/opinion/op-ed/in-the-name-of-cooperative-federalism/article32047918.ece?homepage=true
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The 14th Finance Commission report was accepted in 2015 with the promise that it would devolve more finances to the States. As part of the process, States would have new responsibilities, especially in the social sector. Two years later, the introduction of the Goods and Services Tax (GST) regime was also justified as a grand bargain that would eventually leave all States better off. In reality, tax devolution to States has been consistently below 14th Finance Commission projections. One reason for this has been the economic slowdown, caused primarily by the Central government, and lower-than-expected GST collections. The shortfall in GST collection for 2018-2019 was 22% when compared to projections. Payments have been delayed as well. For example, Centre owed States about 35,000 crore as GST compensation for December 2019 and January 2020, which was only paid in June 2020 after a delay of more than five months. https://www.thehindu.com/opinion/op-ed/in-the-name-of-cooperative-federalism/article32047918.ece?homepage=true