The present mess is rooted in the division of fiscal power in India’s constitution, says Indira Rajaraman, an economist. To ensure balance the central government was granted the right to tax the production of goods; the states could tax their consumption. The drafters ignored services but as they became more important to the economy, their taxation became the preserve of the centre. From the outset India has suffered the problem of “cascades” of tax on tax. The centre slaps an excise at the factory gate; the states compound that with a tax at the point of sale.