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GST is not a tax system, it is an attack on India’s poor, says Rahul Gandhi

Continuing his attack on the Narendra Modi government’s economic policies, former Congress president Rahul Gandhi said that the “GST is not a tax system, it is an attack on India’s poor”.

Also read: GST: States can borrow without hurting economy

Former Finance Minister P. Chidambaram also opened another flank, issuing a six- point prescription to the government on reviving the economy and advising them not to hesitate from borrowing to revive the economy.

Five State governments have written to the Centre rejecting its suggestion to borrow money since the Centre has already expressed inability to pay the GST compensation at the existing rate. The Centre has not paid at least two instalments of GST dues to the States.

Speaking on the GST in the third edition of the video series on economy, Mr. Gandhi said that GST was the second major attack on the unorganised economy. The Congress-led UPA government had introduced this taxation system with the concept of “one tax, minimal tax, standard and simple tax,” Mr. Gandhi said

Also read: The Hindu Explains | What is the GST compensation due to States?

The GST introduced by the NDA government was completely different. Small and medium businesses struggled with the complicated and difficult GST slabs.

“Why are there four different rates? This is because the government wants those who have the means to be able to easily change GST, and those who don’t have means, cannot do anything about GST. Who has the means? India's biggest 15-20 industrialists. So, whatever tax law they want to change can easily be done in this GST regime,” Mr. Gandhi said.

Also read: Delayed GST payment: Interest to be charged on net tax liability from September 1

‘Absolute failure’

He called the GST an “absolute failure” considering the Centre was unable to pay compensation to the States which in turn had made it difficult for the State government to pay salaries to its employees and teachers. “Not only is it unsuccessful, it is an attack on the poor and on the small and medium businesses. GST is not a tax system, it is an attack on India’s poor. It is an attack on small shopkeepers, small and medium businesses, farmers and labourers. We have to recognise this attack and stand against it together,” he added.

Mr. Chidambaram, meanwhile, tweeted six steps to stimulate demand and revive the economy. The foremost step, the Congress leader said, was to transfer cash to the poorest 50% of the families. Free food grains should be offered to all families so that those who needed could take it. Governmental expenditure on infrastructure projects needed an increase and good grain stock could be used to pay wages in kind. The banks needed to be re-capitalised to enable them to lend. And lastly, Mr. Chidambaram said, the government must immediately pay the arrears of GST compensation to the States. “All of the above will need money. Borrow. Don’t hesitate,” he said.

Simultaneously, Mr. Chidambaram also came up with four steps on how to raise the necessary money to do so. “1. Relax the Fiscal Responsibility and Budget Management Act (FRBM) norm and borrow more this year. 2. Accelerate disinvestment. 3. Use the offer of $6.5 billion by IMF, WB, ADB etc. 4. As a last resort, monetise part of the deficit,” he said.

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Printable version | Oct 29, 2020 1:31:02 PM | https://www.thehindu.com/news/national/gst-is-not-a-tax-system-it-is-an-attack-on-indias-poor-says-rahul-gandhi/article32534602.ece

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