India, Oct. 7 -- Now that the hoopla surrounding the Goods and Services Tax (GST) rate cuts is behind us, it is time to take a hard look at India's eight-year-old grand bargain. Billed as a shining example of cooperative federalism, the grand bargain underlying the GST was premised on the willingness of both the Centre and the states to pool their tax sovereignty and jointly exercise the powers to tax. The Centre agreed to share its tax sovereignty, and the states gave up fiscal autonomy to arrive at this grand bargain.

The GST Council was set up as the site for collective decision-making on indirect taxes. Unlike other federal institutions, like the Planning Commission of yore, this was a product of the states coming together rather tha...