After corporate tax cut, fiscal crisis reaches states' doorstep

The recent sentiment-boosting corporate tax cuts will cost the government Rs 1.45 trillion of gross tax revenue

States stand on the brink of a fiscal crisis as their financial situation worsens due to the combined impact of slowing revenue growth on the one hand, and the recently announced corporate tax cut on the other. Most of them might end up either cutting their spending or expanding their fiscal deficit, the impact of which will linger on for years to come, officials and experts have said. 

Tax revenue of 16 major states has contracted by 7 per cent in the first four months of the financial year (April-July), data accessed by Business Standard shows. Although five of them