State finances to take bigger hit than Centre's due to coronavirus lockdown

With economic activities at a standstill, analysts say it may be difficult for states to recoup the losses

The coronavirus disease (Covid-19)-induced lockdown is likely to hit state finances harder than the central government’s in financial year 2019-20 (FY20) and FY21.
 

This is because indirect taxes on transport fuel, vehicle sales, alcohol, real estate transactions, electricity, and films & entertainment account for a bulk of state governments’ tax revenues. And most of these economic activities have either come to a complete halt or have reduced drastically in past two weeks, resulting in a sharp dip in state revenues.
 

In comparison, the central government largely relies on taxes on income, both personal & corporate, manufacturing and imports, where the