The Centre already shared its revenues from all Central taxes, including income taxes with the States before this reform. They shared 32% earlier and increased

The Centre already shared its revenues from all Central taxes, including income taxes with the States before this reform. They shared 32% earlier and increased that to 42% just before GST. Centralising all taxation isn't necessarily a good thing, at least not for all states. Before GST, taxes were levied at the point of manufacture. This helped states with strong manufacturing bases to raise revenue and set up infrastructure and encourage even more manufacturing. A virtuous cycle. States could be mostly self sufficient, using Central funds to augment their money. If the Centre collected all the revenues, the states would be entirely dependent on the Centre. Sure, 42% of the revenue needs to be shared with the states, but the proportion is at the Centre's discretion. I would expect that the party in power at the Centre would funnel funds towards states which are electorally important (UP, Maharashtra) and away from ones that don't play much of a role in national politics (TN, North Eastern states). That's great if you live in UP, not so much if you're Tamil. In such a situation, I foresee that it could actually fuel resentment in states from where wealth is taken and cause the Union to weaken. We see this happening in Catalonia in Spain, for example. I agree with everything else that you said, that there will be short term contraction but this simplified tax code will be helpful for businesses in the long run. Simplifying it even further and making it a central tax only would be a boon for businesses, but possibly not for the Union.