May 8, 2018
Sugar cess is against the principle of GST: Amit Mitra
Bengal Finance Minister Dr Amit Mitra, in a television interview on a national channel last night, spoke strongly against the Central Government’s intention to impose cess on sugar, saying it is against the principle of the goods and services tax (GST). Not just Bengal, Kerala, Tamil Nadu and Delhi have also spoken against the issue. Dr Mitra also spoke on a range of issues.
To pass the decision of sugar cess, the Centre has formed a five-member panel, comprising five finance ministers. Another panel has been formed by the Centre for incentivizing digital payments, which has Dr Amit MItra as a member.
On sugar cess
The idea of GST was meant to subsume all cesses; cesses will only be there for compensating States for specified items, like a few luxury goods and some others. The Centre’s decision to put a cess on sugar is arbitrary, he said. This will only set a precedent for States asking for cesses on specific goods in their own interests, and so the whole idea of GST will be lost.
Even then, it would be implemented wrongly – the Centre would give the income from the cess to the sugar mills, and they would pass it on to the farmers; however, the money would not really reach the farmers, just the sugar mill owners. And it would benefit only one state, which is Uttar Pradesh. Since the committee on sugar cess has mostly BJP finance ministers, it would only toe the line of the Centre. Bengal, as with so many other States, would suffer because the cess would comprise of an additional Rs 3 per kg of sugar. The cess would simply bring in a process of destabilisation.
Revenue deficit of States as a result of GST
Dr Mitra had expressed concern in May 2017 regarding revenue slippage as a result of GST. The structure of the forms, like GSTR-1, GSTR-2 and GSTR-3b, were not ready. Now, 31 States are facing a revenue deficit. He had suggested pilot projects to see how things work out and remove any creases. But that was not done. So the implementation of GST by the Central Government was very shoddy, just like demonetisation earlier.
For the lack of pilot projects, another issue has come up: small and medium enterprises (SME) are specially suffering because they are unable to uplink to fill the forms online because of technical glitches. This is a major issue that has to be solved.
The revenue of the Central Government not picking up is deeply concerning. From where will the Centre get the money for compensating the States, he asked.
An alternative to the BJP: the Federal Front
A great discontent in the country has given rise to the need of a federal alliance. Mamata Banerjee and many other leaders have been speaking on the subject. Coupled with the fall in GDP since 2013-14, a massive messaging from the top is bringing people together. This is resulting in attacks on different people. TV news is full of incidents from all over the country, whether it be an attack on SC/ST communities or for carrying beef, or a killing in the train…there is a rise of people who feel disenfranchised.
Bengal never celebrated Ram Navami in a mass manner as there are so many Gods and Goddesses, so many religious festivals in the State that there was no need to focus on just this. The whole stability in diversity is now being centralized into Ram. A new perspective is slowly creeping into the psyche of people, and once it goes down, it gives rise to lumpens who catch that messaging.
A deeper analysis will reveal why a federal front is emerging. Discontent, disillusionment and the undermining of the subaltern…it’s an evolutionary process out of the feeling that people could have done better. Political economy, sociological process and economics are coming together to give rise to the federal front idea. It’s slow growth on the one hand, and a plethora of discontents.
MamataBanerjee is very accommodative. She has repeatedly said she is not interested in the chair. She wants to see these forces that the people are disillusioned with replaced with a better alternative for the nation.