BW Businessworld

Why GST Reminds Me Of Sardar Patel

Sutanu Guru looks at the politics and economics behind the passage of the GST Bills

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Such is the level of illiteracy and ignorance (apart from blatant ideological prejudices masquerading as punditry) that most Indians really don't know what the GST regime will mean for them. Post demoneitsation, sections of media whose dislike and even hatred for Prime Minister Narendra Modi passes off as love for the Idea of India, there were hundreds of hapless citizens who dies in front of ATM or bank queues. Rest assured the same folks will write and telecast hysterical reports after July 2017 of how small traders have committed suicide after the arbitrary and authoritarian GST regime was imposed.

For this author though, the GST invokes two memories: one personal and the other historical. In the late 1980s (probably 1987), this author was a rookie at BW Businessworld when employees working at octroi check posts in Bombay (now Mumbai) went on a strike. Pundits predicted chaos short of Armageddon. But the army was tasked to man the octroi check posts to tackle the crisis of thousands of trucks being stuck at octroi check posts. The strike was withdrawn after some reports in the media suggested then that octroi collections in Bombay had shot up by ten times when army personnel were manning the check points. For me personally, that was a revelation of the massive amount of corruption that engulfs the Indian economy. It is indeed sad that corruption remains a serious grassroots issue despite three years of Modi.

But when this author looks at the bigger picture behind the GST, the name Sardar Vallabhbhai Patel immediately comes to mind. When the British had finally decided to leave India and give an enduring parting kick in the name of partition, even the territories which were supposed to be Indian were ruled by more than 500 kings and other surnames. Most pundits thought that since India was historically divided because of rival kings snapping at each other while bigger wolves took away the prize, India would fragment into a past of feudal and feuding kingdoms. But a Herculean effort by Sardar Patel changed that forever. India became a unified constitutional republic; much to the amusement initially and then disbelief of western pundits.

This author is convinced that the GST will do to the Indian economy what Patel did to the territorial integrity of India. Patel created one nation. But economically, India has been a fragmented territory where local overlords decide taxes. In terms of federalism, that is a very good idea as India is a country where the centre cannot arbitrarily impose its authority on states. But GST will regain federalism even as it transforms the economy. Recall the lines about octroi check posts. That will stop. Look at the arbitrary manner in which municipal bodies and states impose taxes and withdraw them at will. The GST will end that.

Sure there will be teething problems and doubts and even chaos. But wasn't there chaos when Sardar Patel travelled across India to create India?

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