NEW DELHI: Prime Minister Narendra Modi ’s Sunday address to the nation on GST marked a strong rebuttal to opposition’s allegations, dismissing the tax reform as ‘ Gabbar Singh Tax ’. In his 19-minute speech, he directly addressed the insinuation that GST was a levy conjured up by his govt, driving home the fact that the reform was only a substitute for an array of taxes being levied on goods and services, such as sales tax, VAT and octroi.
The PM said GST was a significant improvement on the earlier system marked by multiple taxes levied in different jurisdictions, which drove up prices and created inconvenience for businesses by delaying movement of goods, hurting competitiveness and deterring investors.
He substantiated his point by citing a report in a foreign media outlet. Official sources told TOI that the reference was to a report in a French publication, Les Echos, which said a French technology company sometimes found the “most costeffective way to send parts from Bangalore to Hyderabad, 570km away, is to dispatch them from Bangalore to Europe, and then back from Europe to Hyderabad”.
Arguing for the need to clean up the mess, the report said the cost of logistics for an Indian manufacturer is often more than the entire wage bill — “more than double, in case of textiles and far higher as a percentage of sales than for international competitions”. PM stressed that GST was not an imposition by his govt, but a project in which states were equal partners.
The speech not only reflected govt’s estimate that the wide-ranging cuts have defanged opposition’s criticism of govt, but also marked transformation of the reform measure from a source of worry, as seen during 2017 Gujarat assembly elections, into something that could be politically capitalised on. The PM framed it as his gesture to the middle class but also to “the 25 crore who have come out of poverty”.
The coincidence of the month-long festivities beginning with Navratri, busiest shopping season, will ensure that a large mass benefits from the reforms, which now bear Modi’s personal imprint. References such as “Shakti ki Upasana” have consistently resonated with a significant part of his constituency.
Run-up to the launch of the “bonanza” was marked by efforts by govt to ensure that the rate cut was passed on. But the address saw Modi approaching traders as partners rather than obstacles. He would build upon the effort again on Monday when he meets traders in Tripura. “In line with ensuring his vision of ensuring ease of doing business and fostering a vibrant entrepreneurial ecosystem, the PM will interact with local taxpayers, traders and industry representatives to discuss the impact of recent GST rate rationalisation ,” said an official release.
The PM said GST was a significant improvement on the earlier system marked by multiple taxes levied in different jurisdictions, which drove up prices and created inconvenience for businesses by delaying movement of goods, hurting competitiveness and deterring investors.
He substantiated his point by citing a report in a foreign media outlet. Official sources told TOI that the reference was to a report in a French publication, Les Echos, which said a French technology company sometimes found the “most costeffective way to send parts from Bangalore to Hyderabad, 570km away, is to dispatch them from Bangalore to Europe, and then back from Europe to Hyderabad”.
Arguing for the need to clean up the mess, the report said the cost of logistics for an Indian manufacturer is often more than the entire wage bill — “more than double, in case of textiles and far higher as a percentage of sales than for international competitions”. PM stressed that GST was not an imposition by his govt, but a project in which states were equal partners.
The speech not only reflected govt’s estimate that the wide-ranging cuts have defanged opposition’s criticism of govt, but also marked transformation of the reform measure from a source of worry, as seen during 2017 Gujarat assembly elections, into something that could be politically capitalised on. The PM framed it as his gesture to the middle class but also to “the 25 crore who have come out of poverty”.
The coincidence of the month-long festivities beginning with Navratri, busiest shopping season, will ensure that a large mass benefits from the reforms, which now bear Modi’s personal imprint. References such as “Shakti ki Upasana” have consistently resonated with a significant part of his constituency.
Run-up to the launch of the “bonanza” was marked by efforts by govt to ensure that the rate cut was passed on. But the address saw Modi approaching traders as partners rather than obstacles. He would build upon the effort again on Monday when he meets traders in Tripura. “In line with ensuring his vision of ensuring ease of doing business and fostering a vibrant entrepreneurial ecosystem, the PM will interact with local taxpayers, traders and industry representatives to discuss the impact of recent GST rate rationalisation ,” said an official release.
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