Covid-19 has put tremendous strain on state budgets, especially in the health sector. The states argue that the implementation of welfare programmes is largely carried out by them, for which they need more financial autonomy. Shamika Ravi, vice-president of economic policy at the Observer Research Foundation, disagrees. She says, “The argument that the GST regime is a highly centralised system is not sound. At the end of the day, a lot of spending responsibilities are indeed borne by the Centre.” She gives the example of the Covid-19 vaccination to support her claim. “Though its implementation ultimately rests with the states, the nature of such problems is that they cannot be left to state capacities. The same applies to markets. Fragmented markets mean big diseconomies. It is not just a taxation issue, but there are also real efficiency gains of a unified market.”