Brief Summary
This video from ABP News discusses the recent changes in GST (Goods and Services Tax) rates in India and their potential impact on the common man. It questions whether these changes truly bring "good days" for the average citizen, examining the government's claims of benefits versus the actual experiences and economic realities. The discussion includes perspectives from various economists and political figures, analyzing the complexities and potential pitfalls of the new GST structure.
- The government claims new GST rates will benefit the common man, but questions arise about the math behind the projected savings.
- Opposition parties argue the reforms are overdue and were prompted by external pressures.
- Experts debate the true impact on GDP growth, inflation, and the financial burden on the poor.
Intro
The host introduces the topic of discussion: whether the new GST rates implemented in the country will bring good days for the common man. He mentions the festive season and the government's claim that these new rates will bring sweetness into people's lives, questioning whether this is just another dream being sold to the public. The host plans to discuss this topic for an hour, inviting opinions, suggestions, and questions from viewers.
GST Rate Changes and Government Claims
The discussion centers on the new GST rates, categorized broadly into 18% and 5%, with higher rates for items like alcohol and cigarettes. The government claims these changes will provide relief to the common man, with Prime Minister Modi stating that 99% of everyday items will now be taxed at 5%. Union Minister Hardeep Puri suggests the GST reform could increase GDP by 0.8%. However, the host questions why these changes weren't implemented earlier if they are so beneficial, pointing out that the government has collected ₹127 lakh crore through GST in the past eight years.
Confusion and Initial Impact
The report presents on-the-ground experiences from the first day of the new GST rates, revealing confusion and inconsistencies in implementation. Some retailers are still selling products at old rates, citing old stock or lack of information from suppliers. While some sectors, like auto manufacturers, have already reduced prices, others anticipate delays in passing on the benefits to consumers. The host questions whether this relief is only temporary and if prices will increase again once expenses rise.
Opposition and Historical Context
The opposition criticizes the government for the delayed implementation of these reforms, with Congress leaders like Jairam Ramesh suggesting they were forced by external factors like tariffs imposed by the US. Supriya Shrinate points out the irony of Modi criticizing the old GST as if he wasn't the one who implemented it. The host also reminds viewers that Modi, before becoming Prime Minister, had opposed GST, citing concerns about its impact on the federal structure.
Economic Analysis and Concerns
The discussion shifts to the economic implications of the GST changes. The government claims a loss of ₹47,000 crore in revenue but projects a benefit of ₹2.5 lakh crore for the common man, raising questions about the feasibility of these figures. The host highlights the decline in domestic savings and the increase in debt among common people, suggesting they were forced to spend their savings due to inflation and taxes.
Panel Discussion: Perspectives and Debate
A panel of economists and political figures debates the merits and drawbacks of the new GST rates. BJP's Rajesh Sharma defends the reforms, stating that the previous tax system involved multiple taxes and complexities, which GST simplified. However, he is challenged on the fact that the lower section of the population was paying 64% of the tax burden. The panel discusses the importance of including oil and diesel under GST to reduce inflation, but also acknowledges the challenges of getting state governments to agree.
Swadeshi and Make in India
The conversation touches on the "Swadeshi" (domestic) movement and the "Make in India" initiative. Concerns are raised about the increasing imports from China, suggesting that MSMEs (Micro, Small & Medium Enterprises) are relying on Chinese products and simply labeling them as Indian-made. The panel questions why Indian consumers are not buying indigenous products and why the government is seeking advice from foreign consulting companies on how to manufacture goods.
GST's Impact and Implementation Issues
Salman Soz from Congress warns that the complicated GST structure created by the government has not delivered on its promises of GDP growth. He points out that corporation taxes are now less than personal income tax, indicating that the common man is paying more tax. The panel discusses the challenges of ensuring that tax relief is actually passed on to consumers and the need for monitoring to prevent profiteering.
Federalism and Revenue Concerns
The discussion addresses the issue of cooperative federalism and the states' concerns about revenue losses due to the GST changes. It's mentioned that the Prime Minister's announcement of the rate cuts on August 15th preempted the GST Council's decision-making process. Madhav Anand argues that the narrative of benefiting the common man is being created before the elections, while the government emptied their pockets for eight years.
Defense of GST and Ongoing Reforms
Maluk Nagar from RLD defends the government's decision, calling it a historic step that will benefit the common people and the MSME sector. He argues that tax reform is an ongoing process and that the country has developed due to the government's earnings. However, he is challenged on the fact that the poor were paying a disproportionate share of the tax burden.
Critiques of GST and Policy Suggestions
Another panelist criticizes the GST structure as a "Frankenstein" creation with illogical tax slabs and tax terrorism through the GST Commission. He argues that the GST has harmed the poor and broken the back of small entrepreneurs. He questions the Prime Minister's role as a "salesman" promoting consumption and suggests that the government should focus on making policies that benefit people.
Political Opposition and Economic Realities
Maluk Nagar accuses the Congress party of opposing the GST reforms despite their benefits to farmers and the poor. He defends the government's actions, stating that the state governments were taking more taxes before GST was implemented. However, he is challenged on the fact that excise duty on petrol and diesel increased significantly during the government's tenure.
Tax Evolution and Revenue Loss
Sharad Kohli explains that tax is an evolutionary process and that eight years is a short time for a tax officer. He argues that the decision to cut GST rates was based on an assessment of how much tax was coming from which item. However, he acknowledges that the projected savings of ₹2.5 lakh crore for the countrymen seem unrealistic, given the revenue loss of only ₹47,000 crore.
Consumer Protection and Final Comments
The panel discusses the importance of consumer protection and the need to prevent companies from making anti-profit under the guise of GST. A consumer protection helpline number is provided for lodging complaints. The discussion concludes with final comments on the complexities of GST and the need for further improvements, with some panelists questioning whether "good days" will truly come for the common man.
