Expectations vs reality: SGST is a victim of irrational estimates

Wide variations in growth estimates for state GST raise serious questions about the assumptions on which the projections were made

In the last week of November 2019, five opposition-ruled states issued a statement that suggested that slowing revenues from goods and services tax (GST) had begun to affect their finances. The Centre had delayed the release of compensation to the states, promised under the GST regime to any state whose annual revenue from the new tax failed to grow by more than 14 per cent. 

The five states — Punjab, Kerala, Delhi, Rajasthan and West Bengal said in a joint statement: “The GST compensation for the month of August and September, required to be paid by the central government sometime in