Revisiting Ambedkar's Fiscal Federalism: Implications for Fiscal Consolidation in Post-GST India

Abstract

Dr. B. R. Ambedkar's fiscal vision laid the groundwork for India's federal financial architecture by playing a major role in crafting constitutional provisions governing taxation, intergovernmental transfers, and state financial safeguards. In the current setting of India's most extensive indirect tax reform, the Goods and Services Tax (GST), revisiting Ambedkar's principles is critical for assessing the consequences for both fiscal consolidation and cooperative federalism. This study critically investigates post-GST revenue performance, tax buoyancy patterns, and emerging intergovernmental fiscal relations, specifically determining whether GST has strengthened or harmed fiscal autonomy and sustainability among Indian states. This article uses a mixed-method research methodology that includes secondary data from the Reserve Bank of India, Comptroller and Auditor General reports, and state budget records, as well as qualitative insights from constitutional analysis, to identify various emerging concerns. These include ongoing salary reliance, inherent structural injustices, administrative inefficiencies, and growing regional budgetary disparities. The findings strongly imply that reiterating Ambedkar's philosophy of balanced fiscal federalism—based on equity, accountability, and strong institutional mechanisms—is critical to accomplishing long-term budgetary consolidation in the post-GST period. As a result, the study makes specific policy recommendations to improve revenue mobilization capability, revise the Finance Commission's transfer formula, and strengthen cooperative federalism in order to achieve shared prosperity and long-term financial stability.