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FEDERALISM AT CROSSROADS
The New Indian Express Mysuru
|December 31, 2025
As GST reforms swell Centre's revenue kitty, many states say two-rate structure unevenly burdens their economies; fund onus on states under G-RAM-G Act raises queries over fiscal stress on welfare measures
INDIA'S federal structure rests on a calibrated balance between a strong Union and fiscally and politically empowered states.
Although states shoulder wide responsibilities in health, agriculture, law and order, and welfare, revenue-raising powers are increasingly being centralised. Over the past year (late 2024-2025), this latent imbalance has crystallised into political and economic contention.
Fiscal Federalism: GST, Cesses and the Erosion of State Space
Introduced in 2017 as a putative "grand federal bargain", the Goods and Services Tax has emerged as the principal arena of Centre-state recrimination. Although constitutionally conceived as a shared levy, states often claim that they retain little effective autonomy over rates and remain dependent on timely compensation and transfers.
This story is from the December 31, 2025 edition of The New Indian Express Mysuru.
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