Gujarat polls ahead have ended Centre’s arrogance on GST, says Manpreet
DECISIONS IN THE BJPDOMINATED GST COUNCIL TAKEN WITH ‘CONSENSUS’ BUT CONG FINANCE MINISTERS HAVE NO SAY, SAYS PUNJAB FM
CHANDIGARH:As finance minister of a Congress-ruled state, Punjab’ s Ma np re et Bad al was among the most vociferous votaries of the goods and services tax (GST) even as his party’ s vice-president Rahul Gandhi and other central leaders opposed the “hasty” implementation from July 1 this year. Manpreet had hailed GST as a “game-changer” for a consumption-based state such as Punjab that was promised revenue growth of 14% for five years under the new indirect tax regime put in place by the B JP-led central government.
Less than four months later, Manpreet finds himself struggling to pay even salaries and pensions as the Centre has this month declared to send only quarterly remittance of state’s share in G ST .“Finance ministers from several states had objected to the quarterly compensation, the high tax on restaurants, and problems being faced by small traders, at the G ST Council meeting in Hyderabad in September ,” Ma np re et told HT ,“But the Centre was not willing to listen to us. Now, owing to the upcoming Gujarat polls and the letter of senior BJP leader (and former Union FM) Yashwant Sinha against G ST, there is a change in the Centre’s attitude. The arrogance has finally gone.”
WHY NOT SPEAKUP EARLIER?
On why FMs from Congress states were not striking a dissenting note in the council meetings, he said the decisions are take non the principle of unanimity .“Most ofthe statesareruledby the BJP. There arejusta fewfinance ministers from the Congress. We have no say. We all said the situation on the ground was not good. The cycle and textile units— Punjab’ s leading industry—has been hit badly with GST.”
Officials say now the Centre is “bending backwards” to accommodate concerns of traders .“Restaurants are ready for being in the 18% slab without input credit, but the central government is eager to bring restaurants in the 12% slab now. It shows the Na rend ra Mo di government’ s nervousness ,” said a senior officer in the state government.
CAPT WAS KEEN,BUT...
Capt Amarinder Singh too had been hailing GST even when he was not the CM but deputy leader of the Congress in the Lo kS ab ha. When his party stalled the Parliament over GST, Am arin der had said ,“Punjab will suffer the most by stalling of the bill.” But the Congress is now seeing its landslide win in the Gurdaspur Lok Sabha bypoll as a mandate against GST, and hopes it will hit the BJP’s fortunes in upcoming polls in Himachal Pradesh besides Gujarat.
Punjab’ s disillusionment with the Union finance ministry helmed by A ru nJ a it leyi snot just confined to GST. It also stems from not getting a nod to relaxation of the borrowing limit to roll out a debt waiver for farmers, despite both Manpreet and CM Am arin der meeting Prime Min is- t er Mod ian dJ a it ley to push for it. With BJP-ruled Uttar Pradesh too seeking such a relaxation to honour its loan waiver promise to farmers, the Centre feels nod to one state will open up the floodgates with similar demands.
DESPERATE MEASURES
Punjabi snow hoping to fund the debt waiver from tax on foodgrains. The state cabinet had even hiked the rural development fee on crops, Punjab’ s main source of revenue, by 1% in August. Later, it rolled back the hike on crops that are not under the minimum support price (MSP) regime.
And desperate times call for desperate measures. Manpreet has asked all departments to launch one-time settlement schemes to end litigation, recover dues, and cut costs. Primary schools with fewer than 20 students are being merged with others nearby. And employees on unsanctioned posts are being shunted out or adjusted on posts. Manpreet will make a presentation to the CM on Tuesday. The challenge in the post-GST scenario for Punjab is to keep itself financially afloat.
SAD WAS WARY
While in power, BJP ally Shiromani Akali Dal (SAD) was more wary of GST’s gains for Punjab than the Congress. The then state FM Parminder Singh Dhindsa had said GST’s success is based on assumptions of higher growth rate and lower tax leak ages .“But to what extent it will be able to plug tax leak ages has tobe seen ,” Dhindsa had said.