BJP fends off traders’ ire over GST, demonetisation in Surat

In July this year, Gujarat’s richest city Surat ground to a halt as thousands of textile and diamond traders shut down markets protesting the imposition of the Goods and Services Tax (GST).

Later that month, the businessmen called a strike, complaining crores of profits would be wiped out if the government didn’t heed their demands.

Anger against the BJP simmered and the Congress sensed an opportunity. But as election results poured in from the industrial belt on Monday, it became clear that the BJP had been successful in fending off the Congress challenge and winning back the trust of the business community. The saffron party retained all 12 seats in Surat city. Of the 16 seats in the district, the Congress could win just one.

The BJP lost some ground across the state. But in major urban areas such as Ahmedabad, Vadodara and Rajkot — where large trader communities were affected by demonetisation as well as GST — the saffron party trounced the Congress.

“No doubt, we were unhappy with the GST but the BJP governments in the state and at the Centre took several steps to correct the mistakes. On the other hand, we were not confident that the Congress would solve our problems. It is the BJP which is ruling at the Centre and the trading community has been comfortable with that party,” said Sanjay Jagnani, former president of the Federation of Surat Textile Traders Association. Surat is home to 65,000 textile traders, dominated by the Patidar community, who work in an industry that employs more than a million people.

When Hindustan Times visited the city in November, many traders complained their turnover was down 40% and that the elaborate process of filing GST returns bogged them down. Similarly, diamond traders claimed their ₹1.5 lakh crore business had shrunk by 15%.

But on Monday, traders said they were satisfied with the steps taken by the government to reduce tax rates on several items and simplify filing processes in the run up to the December polls.

Moreover, many traders were wary of deserting the BJP, which they had supported for generations, and voting for the Congress.

“There was an impact on diamond industry but the traders were not completely against the BJP. The seats the BJP lost was in the rural areas due to the agrarian crisis and Patidar agitation,” said Dinesh Navadiya, regional chairman of The Gem and Jewellery Export Promotion Council.

The BJP deployed senior ministers such as finance minister Arun Jaitley and railway minister Piyush Goyal to meet traders’ representatives in major cities and assure them of the steps being taken by the government to resolve the issues faced by them.

In addition, Prime Minister Narendra Modi’s campaign helped calm nerves and bring traders back into the BJP fold.

“The Congress put up a good show but it could not assure the traders that it would be friendly to them. On the one hand, there was PM Modi and on the other hand, there was no strong name from the Congress camp. After all, our trade has been supported by the BJP governments in Gujarat for two decades now,” said Pravin Nanavati, a leading diamond trader and former president of Surat Diamond Association.

But some traders said the results were a warning to the BJP, which saw its tally dip from 115 in the previous election to around 100 seats this time.

“The people have given them a warning. The BJP will have to fulfill its promises made to the traders with regards to GST. If they don’t fulfil them, things will become more difficult for the party in 2019,” said Navadiya.

SURAT IS HOME TO 65,000 TEXTILE TRADERS, DOMINATED BY THE PATIDAR COMMUNITY, WHO WORK IN AN INDUSTRY THAT EMPLOYS MORE THAN A MILLION PEOPLE