ISAS Insights

The introduction of the Goods and Services Tax in India effective 1 July 2017 is significant, not only as a major reform, but also as an illustration of the growing importance of India's states in the country's economic management. As India graduates from first generation to second generation reforms, the involvement of states is becoming increasingly important in moving the agenda forward. The role of states is increasing, also because they get to spend a larger share of the total public expenditure and are on the frontlines in implementing governance reforms. How states use their growing importance will determine how India performs on growth and welfare on the way forward.