Will GST exacerbate regional divergence?

This article analyses the extent of regional disparities in income per capita in India, considering both disparities amongst and within major states. For within-state inequality, this article is the fi rst to use a "nightlights" luminosity data set as a proxy for gross domestic product per capita, whereas the choice of a crisper data set, comprising the 12 largest states, yields sharper results than in previous literature. It concludes with a cautionary note on the goods and services tax, which, contrary to the optimists, is likely to further exacerbate, rather than ameliorate, regional income disparities, marking the need for a turn to "place-based" economic policies.