Diwali gift or poll promise
Till a few days ago, t lawyer-turned-finance minister, Arun Jaitley, would advocate that the goods and services tax (GST) had brought in its 'desired' impact on the Indian economy. But, BJP veteran Yashwant Sinha's recent attack on the finance minister appears to have set the cat among the pigeons. Though the finance minister jibed at his predecessor, as yet another aspirant for his job, he was aware that every argument in Sinha's powerful critique was spot on. Realising the alarming prognosis, Prime Minister Narendra Modi finally asked Jaitley, who heads the GST council, to bring out some relaxation in the implementation of the GST as it appears to have caused severe harassment to the traders, which was against his government's policy of ensuring 'ease of business'.
Much on expected lines, the GST Council introduced some changes to the GST, in which tax rates on 27 products were slashed, aiming to provide relief to small and medium businesses. But, can these small changes bring the economic slowdown back on track? For the optimistic PM, the answer came in poll-bound Gujarat, where he hailed the sweeping changes in the GST to provide some relief to the small and medium businesses, saying his government does not want the country's business class to get caught in red-tape. The otherwise media-ignoring Modi didn't miss the chance to quote the newspapers, which carried headlines that Diwali has come 15 days earlier with 'some very important decisions' related to the much talked about, GST. He also said the government had earlier stated that it will study the GST for three months following its implementation and subsequently fix the problems. As Gujarat, the home state of Modi, is heading for Assembly elections this December and there have been reports of anger among traders against the Centre's decision of demonetisation and GST, the Prime Minister tried to provide an emotional colour to his government's 'alleged' failure on the economic front, stating that when there is trust in the government and honesty is seen behind decisions, then the country joins in despite difficulties. But, with the economic mess in the country deepening and the pain being felt by those at the bottom, the consolidated and increasing voices of disagreement can turn into vox populi at any moment. What is more alarming is that the RSS had also started moving away from the Modinomics, acknowledging that the rich are getting richer and the poor poorer. In his annual Vijaya speech, RSS chief Mohan Bhagwat asked for a 'new economic model'.
Even for GST, economic pundits have said, its purpose was undermined before its implementation. The tax reform aimed to enhance the growth of the Indian economy finally became a testament of sheer ineptitude and amateurish handling by the bureaucrats. Even the government refused to acknowledge the clutter, confusion, and cost to the economy by botching up the GST conception and implementation. Interestingly, nobody could, in fact, anticipate that 'One Nation, One Tax' will finally turn into 'One Nation, Seven Taxes' – now the highest in the entire world. Despite earning a bonanza tax of Rs 2,73,000 crore annually from the heavy petrol taxes alone, the government has still not laid down any roadmap nor given any indication of bringing petroleum products, electricity and real estate within the ambit of the GST. Not only that, reeling under the lack of market-driven MSP and the cycle of indebtedness, no relief has been provided to the farmer or agriculture sector from the burden of taxes. Fertilisers, tractors and all other agricultural implements, pesticides and even the cold storages and food grain handling systems are being highly taxed. Similarly, the textiles, the second biggest employment generator after agriculture, had been facing deep stress owing to a distorted duty structure threatening to wipe out the living subsistence of millions of traders, cloth merchants, and micro, small and medium businesses.
And, perhaps, the reports from the PM's home state had foxed him and he immediately asked for relaxation in the different GST brackets. Ruined first by demonetisation and then the GST, Gujarat's businessmen seemed to be turning against the BJP. But, since Modi is a master of polarising the strong critics in his favour, he would surely make many more announcements to woo the mandate in Gujarat. The perception in the BJP, that is ruling Gujarat since 1995, and rightly so, is that Modi alone could dwarf all caste contradictions and anti-incumbency in the state just by a few visits with his positioning as an honest and development-oriented world-class leader. After all, public ire takes no time to vanish in politics!
