Board of Governors of the Federal Reserve System

Figure 1

Figure 1 is a map of India with all its states. It shows where the main international seaports and airports are located. The main seaports are located in West Bengal, Gujarat, Maharashtra, Andhra Pradesh, Goa, Gujarat, Karnataka, Kerala, Maharashtra, Orissa, Tamil Nadu, and West Bengal. Then main airports are located in Andhra Pradesh, Delhi, Karnataka, Kerala, Maharashtra, Tamil Nadu, and West Bengal. In addition to showing the main international port locations, Figure 1 also shows the population in each state. It highlights that half of the Indian population lives in states without access to an international port.

Figure 2

Figure 2 shows a heat map of all Indian states. It shows the estimated state-wise welfare percent changes under the model assumptions after the GST implementation. The first thing it highlights is that each state experiences a welfare gain, which implies that the GST is estimated to be an inclusive policy. In addition, Figure 2 shows that the ports states mostly benefit, with welfare gains rising to 16 percent. The non-port states, however, experience smaller welfare gains of 3 percent on average and the states with the lowest welfare gains are located in the north eastern regions of India.