One Nation, One Market

The goods and services tax presents several challenges from weak regulatory systems to prevent profiteering, to inadequate long-term provisions for the needs of states. Not much has been said about how this economic policy is also a confluence of neo-liberalism and Hindutva, and assists in the building of a Hindu rashtra.

On 1 July 2017, the Goods and Services Tax (GST), a talking point since 2000 when it was first mooted by the Atal Bihari Vajpayee government, was rolled out, adding one more feather in the cap of Prime Minister Narendra Modi. The implementation of GST is being euphemistically projected as the biggest tax reform after independence, and hyperbolically compared to the political unification of India brought about by Vallabhbhai Patel in 1947–48 with the annexation of the princely states. GST is said to bring about the economic unification of India in the form of a single market. When the Manmohan Singh-led United Progressive Alliance (UPA) sought to do the same in April 2010, it was the Bharatiya Janata Party (BJP) that vehemently opposed it. The UPA presented three drafts of the bill thereafter but the BJP remained adamant in its opposition. Yashwant Sinha, the chairperson of the then parliamentary standing committee, had said that the GST should first be implemented at the central level by merging central excise and service tax. He insisted that the centre should “present an example to the states that this is how we do GST and then the states might follow.” Modi, chief minister of Gujarat at the time, represented the opposition from the states. In a complete somersault, his party and government today are going gaga over the roll-out of GST.

While there may not be much dispute on the desirability of a simplified tax structure in the form of GST, it all depends on how it is structured and implemented in a vast country such as India, with its diversity and constitutional complexity. While it may be apt to look at these aspects of the GST, it is more pertinent to understand the political agenda of the BJP that has pushed for its expeditious roll-out defying the wise counsel of experts against the risks involved.