GST : threat to fiscal autonomy

From the very beginning after taking over the reigns of power at the centre the Narendra Modi led BJP government has been vocal against the Jammu Kashmir’s special status. To gain support from people their entire election canvassing in UP and other states revolved around this particular point ,i.e., scrapping of Article 370 that guarantees special status to Jammu and Kashmir. After marking victory in these states and now eyeing on 2019 parliament elections the BJP top brass wants to do away with it to project it (Article 370 abrogation) as the party’s biggest achievement and use it as a cover to hide its failures in governance and deliverance. However, anticipating resistance from masses rather than directly fiddling with it, the top BJP leaders are opting for different options to achieve this goal. Sometimes they talk of Sainik Colonies and sometimes they approach Supreme Court to challenge the article 35A which is directly linked with Article 370. Unfortunately their ally in state apparatus has been submissive and are providing them free hand to get their job done. In this connection, perhaps they have come-up with another clever maneuver namely GST to harm whatever little state’s fiscal and political autonomy is left there.
As a matter of fact, GST is one of the important tax reforms in India and can have advantageous influence. As per economic analysts, it aims at removing bundle of indirect taxes and as compared to earlier tax structure it is simplified tax policy. It is expected that GST would lower burden of taxes on the manufacturing sectors and thus manufacturing cost would be reduced that would in turn minimize the prices of consumer goods. Lower prices will increase demand and this can have positive impact on production of goods. Some economists even believe that GST would be effective in curbing circulation of black money and corruption that indirectly would benefit common man. Experts are of view that GST model of taxation is boosting for the economy of the country. It has been estimated GST alone can improve GDP growth by 0.9-1.7%. However, as far as Jammu & Kashmir is concerned it could prove detrimental as the special status of J&K comes under threat with GST implementation. Special Status that J&K enjoys under Article 370 grants special power to State assembly to pass the bills and laws related to taxation but with implementation of GST, State Assembly can no longer enjoy this autonomy and cannot make any change to taxation in the state, thus its implementation in present form constitute major surrender of financial power which will set back to J&K’s fiscal autonomy.
Prominent political and economic experts of valley have categorically objected to the implementation of GST in state. According to them GST implementation would be biggest ever assault on state’s autonomy and will throttle the state’s autonomy, affecting about 90% trade of state Jammu and Kashmir. Although there have been conferences, meetings and debates pertaining to GST implementation but hitherto unanimity has not been attained on this point. In fact the unclearness of State Government about this issue has really made entire issue fishy. They should come clean and blue-print on GST must be put in public domain so that confusion with respect to intensions behind implementation of GST without any modifications is cleared, otherwise GST seems to be a conspiracy to erode the state’s special status because BJP regime is hell-bent on damaging it. Opposition, other political parties, civil society groups, industrialists and traders need to be vigilant and cautious about the developments if the state’s autonomy on fiscal matters has to be safeguarded. Whatever happened so far let not it happen again and let’s not repeat mistake.
—-(The contributor regularly writes on current political events, issues concerning politics and development exclusively for “Kashmir Horizon”)