Business

On GST, Modi Must Listen to Criticism From Within the Sangh Parivar

The economic wing of the Sangh parivar has been an important voice in raising concerns over how India’s Goods and Services Tax will hurt the informal economy.

A man sits on top of a rickshaw loaded with card boxes at a wholesale market in the old quarter of Delhi, India, August 2, 2016. Credit: Reuters/Adnan Abidi/file photo

A man sits on top of a rickshaw loaded with card boxes at a wholesale market in the old quarter of Delhi, India, August 2, 2016. Credit: Reuters/Adnan Abidi/file photo

This is the first in a two-part series on SJM’s criticism towards the current government’s economic policies. Bharat Dogra is a freelance journalist who has been involved with several social movements and initiatives.

While India’s prime minister may not be widely known for his willingness to listen to his critics, there are very few who question his dedication towards the wider Sangh parivar. Hence, while we may not expect him listen to the feedback of outside critics, one would expect him to be much more responsive to any criticism emanating from within the Sangh parivar.

The Swadeshi Jagran Manch (SJM) is an integral part of the Sangh parivar. It is primarily known for its principled stands on several economic issues, which have provided it a certain moral strength in no small part because it has avoided cheap communal and divisive statements in its widely circulated publications. Of late, the SJM has raised several important issues. While some of the government’s policies are proving ruinous or at the very least highly problematic for India’s small and informal sector, what is not so well-known is that the SJM has played an important role in voicing these concerns, especially in the context of the recently rolled-out goods and services tax (GST) initiative.

Just before the introduction of GST, in a press note dated June 28, the SJM made its stand clear: “…Swadeshi Jagran Manch has been saying for long that though GST will make compliance easier for big businesses, multi state operators and TNCs ( transnational or multinational corporations), but at the same time onus of compliance for small scale industry may cause a host of problems, putting them at a loss vis-à-vis their competitors from big industry and businesses. Further, taking away of the exemption up to Rs 1.5 crores, would further put them at disadvantage..”

It’s clear from the statement that SJM’s criticism is focused on how government policy may be favourable for the big players including MNCs and harmful for the small and informal sector. What’s more, the press note states that the SJM has been voicing this criticism for long.

So, in case of increasing problems for the small and informal sector as the GST saga unfolds, the prime minister cannot say that he was not warned.

Continuing its highly critical content and tone, the press note quoted above notes, “While deciding about the rates of GST due care has not been taken to keep rates low for  commodities being produced by SSIs (small scale industries) and providing huge employment. Beedi, crackers, beverages, biscuits, pickles, confectionery, scissors and host of other products produced by SSIs and cottage industries are attracting higher rates of GST, which is likely to affect their competitiveness.”

The press note then goes on to remind the government that SSIs are of core importance in our country. If these are harmed by the new tax regime, then influx of imports particularly Chinese imports will increase.

The last para of the press note is very interesting. Here it is first noted that “a large number of SSIs and trade organizations, belonging to several sectors, commodities and regions are opposing GST in its present form and rates of GST” and then the SJM goes on also to express its “solidarity with genuine demands of these groups”.

In a separate article titled ‘GST- Worries Ahead’, Ashwani Mahajan (all-India co-convener of SJM and a professor of economics at Delhi University) has approvingly quoted Amit Mitra, finance minister of West Bengal as saying that the GST network is not fully prepared. Mahajan adds, “There are many who share his opinion about lack of preparedness for GST.”

Mahajan further notes in a very straightforward and critical statement (this was written just before the introduction of GST): “As the date of implementation of GST is approaching , the heartbeats of small entrepreneurs and small traders are increasing. Although big companies are a happier lot with GST taking over, small enterprises feel that GST may cause huge loss to them.”

This article, which was also published in the July issue of Swadeshi Patrika, also says that under GST “India’s small entrepreneurs will be subject to discrimination and confusion” and also that “GST does a gross injustice to SSIs.”

The SJM’s critical stance towards the current government’s economic policies as the second part of this series will show, is not merely confined to the issue of GST. In fact, this organisation has for sometime taken an even more harsh stand on farm policy-related issues. 

The SJM is also not the only organisation of the Sangh parivar to voice strong criticism of the policies of government policies. In fact, others have identified as many as 14 areas of their criticism and concern.

Bharat Dogra is a freelance journalist who has been involved with several social movements and initiatives.

  • ashok759

    On the economy, the government should pay heed to good advice from all quarters.