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Abstract

Digital governance has emerged as a critical instrument for promoting transparency, efficiency, and inclusiveness in public financial management. In India, the implementation of the Goods and Services Tax (GST) marked a transformative shift toward a unified indirect tax system supported by digital infrastructure. This article examines how GST reforms, enabled by technology-driven tax administration, contribute to strengthening inclusive economic growth while reshaping the dynamics of fiscal federalism, with a particular focus on the state of Tamil Nadu. The study evaluates the role of digital platforms such as the Goods and Services Tax Network (GSTN) in improving tax compliance, reducing leakages, and facilitating real-time monitoring of revenue flows. It further analyzes the implications of GST for intergovernmental fiscal relations, including revenue sharing, compensation mechanisms, and state-level fiscal autonomy. Using policy analysis, secondary data, and state-specific revenue trends, the article explores how GST has influenced Tamil Nadu’s fiscal capacity, public expenditure priorities, and development outcomes. The findings suggest that while digitalized GST administration has enhanced transparency and broadened the tax base, challenges persist in balancing central coordination with state fiscal independence. The study argues that strengthening digital governance frameworks, improving cooperative federal mechanisms, and addressing revenue volatility are essential for ensuring that GST reforms effectively support inclusive and sustainable growth in Tamil Nadu and across India.