(i)  Tax reforms  States initiated several measures towards enhancement/restructuring of the taxes within their fold, such as, land revenue, vehicle tax, entertainment tax, sales tax, electricity duty, tax on trades and professional tax. It was recognised that competitive sales tax reductions for attracting investment led to revenue losses without commensurate gains.
With a view to harmonising inter-State taxes and ultimately switch over to State-level value added tax (VAT), States initially introduced uniform floor rate during 2000 before finally switching over to the Value Added Tax (VAT) in lieu of sales tax between April 2005 and January 2008, which has been an unqualified success in raising the tax revenue for the States.