Narendra Modi and GST: The Evolution of Policy
When Narendra Modi was in opposition, his Bharatiya Janata Party (BJP) opposed the implementation of the Goods and Services Tax (GST). However, once in power, the BJP brought forward GST with significant modifications. This article delves into the reasoning behind the initial opposition from the BJP and the subsequent changes that led to the passage of GST.
Why Was Modi Against GST When He Was in Opposition?
During his time as the leader of the BJP, Narendra Modi opposed the GST primarily because of the potential impact it could have on certain states, particularly those with manufacturing businesses. The BJP, much like other opposition parties, sought certain amendments to ensure that the new tax structure would be more beneficial for the masses. Their main concern was the compensatory mechanism for states that might lose revenue due to the shift to GST.
Historical Context: GST During Congress and BJP Tenure
When the Congress government was in power, they attempted to pass the GST bill. However, opposition parties, including the BJP, raised concerns about the implications of the bill. These concerns were not purely about the GST itself but also about the upcoming Constitutional Amendments required to implement it. This essential step was a deal-breaker for many opposition parties, including the BJP.
When BJP was in opposition and the Congress was in power, opposition parties often demanded major reforms and compensatory measures. They sought changes that would ensure the GST implementation would be fair and less burdensome for smaller states and businesses. The BJP, under Modi's leadership, took a united front in opposing the Congress's plans, unlike the fragmented approach seen in opposition during this period.
BJP in Power: Implementing GST with Amendments
Once the BJP came to power, they introduced significant amendments to the GST bill. This change in stance was not about changing their views but about aligning with practical realities. The BJP aimed to make the GST framework more manageable and favorable for the broader population. Some of the key changes included:
Introducing harmonized tax rates to make the system simpler. Upgrading the compensation mechanism for states. Ensuring better preparedness for traders and small and medium enterprises (SMEs).These modifications were seen as positive steps towards making the GST a more accepted and beneficial tax structure.
Conclusion: GST Implementation and Its Impact
The GST implementation under the BJP has faced mixed reviews. While it represents a significant regulatory reform, the diversity in rates and complexities have led to its implementation being hailed as a necessary evil, especially given the looming 2019 election cycle. Critics argue that a simpler, three-rate system, with higher exemptions and fewer goods included in the GST, would have been more beneficial in the long run.
It is important to recognize that political parties can evolve their positions when in power and opposition. While the BJP may have supported the GST later, the initial opposition was rooted in genuine concerns and a desire to ensure that any new tax structure would benefit the overall economy.
Ultimately, the evolution of the BJP's stance on GST showcases the political dynamics at play and the need for thoughtful reforms in taxation to serve the interests of a diverse and economically complex nation like India.