I will say it again: states that impose localised lockdowns have no right to ask for GST compensation later. As a matter of fact, they should compensate the central & other state governments for tax shortfalls owing due to their inability at handling the situation.

It’s all about incentives; whether positive or negative. Right now states have no incentives - at least those that don’t have elections in the near future. Let us fix the problem of incentives and we shall have governments function efficiently whether at state or local levels.

Let me rephrase the first tweet in the form of a Q:
Why should states, that due to their inability to contain the virus impose localized lockdowns, benefit from the 14% guaranteed growth in GST revenues?

More so as localized lockdowns will invariably hit overall GST collections.

People need to take a closer look at state finances before jumping on this argument - and while they are at it, also look at the share of developmental expenditure by each state and compare it with the share spent by the central government under the CSS.