The Goods and Service Tax has been a grand bargain in the cooperative federalism. But issue of GST compensation to the States in the aftermath of lockdown threatens this achievement in the federalism. In light of this, explain the issue of compensation and suggest the ways to deal with it. 10 marks

Mentor’s comment-
  • In the in intro, briefly mention the issue of compensation.
  • In the body, mention how GST has been an experiment in the federalism. Next mention the condition of compensation to the states and how pandemic led to the loss of revenue. And subsequent issue of compensation to the states. Mention how this harms the idea of federalism. 
  • Conclude by mentioning how Central government well placed to raise the revenue in such situation and its responsibility to compensate the States. 
Inline Feedbacks
View all comments