EDITORIAL

‘Act of God’ in ‘Ram Rajya’?

Punjab Today

Punjab Today

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FM’s ‘Act of God’ comment has opened a Pandora Box in the nation.

FOR THE LAST couple of years – at the cost of all other human development parameters – India has been progressing towards Ram Rajya. Ram Rajya is the raison d’être of the Hindutva forces. Recently we even consecrated the Ram temple in Ayodhya. Then, what exactly did the Finance Minister mean by the contraction of economy due to the Coronavirus pandemic being an ‘Act of God’?

The 41st Goods and Service Tax Council meeting took place on Thursday. In this meet the state and central ministers discussed the issue of payments due to the states from the Centre for the period April to July. The amount is estimated at Rs 1.5 lakh crore. This is the amount the Centre has already collected. Yet, it has not paid it to the states.

The question is: when the Centre has collected this amount, why can’t it simply give it to the states?

Instead of demanding the payment of GST already collected, the states fell for the game the Centre played. The Centre projected that while the total GST compensation is estimated to be around Rs 3 lakh crore this year, the cess collection is expected to be around Rs 65,000 crore – an estimated compensation shortfall of Rs 2.35 lakh crore. The two options the Centre offered to the states were:

a) A special window to states to borrow the projected GST shortfall of Rs 97,000 crore from the Reserve Bank of India. To be repaid after five years of GST, ending June 2022, from the compensation cess fund.

b) To borrow the entire projected shortfall of Rs 2.35 lakh crore – both on account of faltering GST collections and the expected shortfall due to the pandemic – facilitated by the RBI.

Four states and one Union Territory, all not ruled by Bhartiya Janata, have voiced their concerns over the proposals.

Kerala, Punjab, West Bengal, Delhi and Puducherry. When we look at the reasons the opposing states presented against the two options – unconstitutional, mortgaging the future, betrayal of federalism, increase in states’ debt servicing liability – it is clear that they apply to the BJP-ruled states as well. Yet, the BJP-ruled states and some others remained silent.

Ideally, for a state government, the people of their states should matter most. Yet, in this case, the party dictated line prevailed. This is betrayal not only of ‘cooperative federalism’ that the Prime Minister touted in July 2017 while launching the GST but also the trust of the people in their government.

The irony is those few states that have opposed the Centre offer will not be heard. This actually is breakdown not just of the idea of federalism to which all Centre governments have merely paid lip-service all the past seven decades but also of democracy – the whole system of taxation and responsibility of the government state or Centre.

'Act of God'The fact is the economy did not tumble only during the Coronavirus outbreak since it was officially recognised in March this year. India’s Gross Domestic Product growth rate has declined from 8.2 per cent in the fourth quarter of 2017-2018 to 3.1% in the fourth quarter of 2019-2020. The FM using the phrase ‘Act of God’ does not explain this earlier fall.

Earlier the demonetization in November 2016 and then the implementation of the flawed GST tax slabs led to the downfall. Even the recent slowdown in economy is due to the sudden, unprecedented lockdown – longest in the world – imposed by the Centre all over the nation to contain the Coronavirus outbreak when the cases and mortalities were a minuscule fraction of current spread of the pandemic.

Willy-nilly, the FM’s ‘Act of God’ comment has opened a Pandora Box in the nation. Can every debtor to banks, to institutions, those paying Equated Monthly Instalment (EMI) for houses, for vehicles, for businesses claim the same ‘Act of God’?

Will the ‘Act of God’ apply to parents of school going children or thus risking the viability of the private education sector? Or to parents of wards studying professional courses? Will the same act apply in bazaars and restaurants, basically any service anyone receives?

The simple fact is the government has thoroughly mismanaged the economy in its projected Ram Rajya. It cannot be now blamed on God. Sadly, the act of Devil is the deviousness and lack of sincerity of the Centre by which it has used the nation to further its interest – crony capitalism.

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Punjab Today

Punjab Today

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