As the 56th GST Council meeting concluded in Delhi on Wednesday, Jharkhand Finance Minister Radhakrishna Kishore warned that the proposed GST reforms could result in an annual revenue loss of around Rs 2,000 crore for the state. He urged the central government to provide compensation for the estimated shortfall.
Kishore highlighted that the revenue loss would primarily impact Jharkhand’s automobile, cement, and other manufacturing sectors. He noted that Jharkhand, being a manufacturing state, has been adversely affected by the GST system, which has weakened its internal revenue collection.
“Jharkhand’s per capita income is Rs 1.05 lakh per year. Due to limited purchasing power, the state does not qualify as a consumer state. Consequently, Jharkhand has suffered revenue losses following the implementation of GST,” Kishore said.
Citing historical data, he noted that between 2017 and 2024-25, Jharkhand incurred an estimated revenue loss of Rs 16,408 crore, which could rise to Rs 61,670 crore by 2029. He also pointed out that 75–80% of the state’s coal and steel production is consumed outside Jharkhand, meaning that the benefits of GST accrue largely to consumer states.
Kishore suggested a balanced approach to GST reforms, including:
- A robust revenue protection framework
- Supplementary duty on sin and luxury goods
- Guaranteed compensation mechanism for states
He emphasized that such measures would protect the fiscal autonomy of states while advancing GST reforms in the spirit of cooperative federalism. Kishore recommended that Jharkhand be provided a guaranteed minimum of Rs 2,000 crore annually until the state’s revenue base strengthens.
(With Agency Inputs)
