With GST, PM Modi fulfilled Atal Bihari Vajpayee’s dream of India’s economic integration

Vajpayee was the prime minister who first 'introduced' the tax reform in 1999.

 |  3-minute read |   01-07-2017
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The biggest economic reform India has seen since the liberalisation of 1990s, the Goods and Services Tax (GST) is a reality now with the "dramatic" midnight launch programme at the Central Hall of Parliament on June 30, marking a true "disruption" in India’s tax structure.

Combining more than a dozen levies, the GST has created a uniform market across India for the first time.

No doubt, it’s the political will of the Narendra Modi government that has brought the GST into effect even though he was critical about the mega-tax reform earlier.

The BJP government at the Centre has shown exceptional enthusiasm to make the major tax reform in post-independent India a reality. Despite the confusions over the implementation, the massive tax reform is a game-changer in the economic history of India, ending tax terrorism and creating an eco-system where business can be done in an easier way.

The biggest problem facing Indian business is our complex tax system, and the GST is a brilliant effort to fix this problem by making tax structure simple yet effective.

It’s more transparent, and there’s little scope for inspector raj, less chances for tax evasion, and no exploitation of businesses. With an expected increase of two per cent in GDP, the GST is a practical stepping stone to create the idealistic concept of one nation, one market and one tax.

If you’re ready to think positive, leave all the apprehensions, the implementation of GST definitely matters a lot for this emerging economic powerhouse of $2 trillion in the process of its transition to a developed one.

As the prime minister said, the GST is a simple and good tax. We have been talking about this great reform since 1999, but only now we are switching to it.

Forget the politics, and appreciate PM Modi for this commendable achievement, by materialising it. But the real credit for GST goes to Atal Bihari Vajpayee, the first non-Congress prime minister to serve a full five-year term in India’s political history, and not the Congress which actively engaged in claiming the legacy.

Vajpayee was the prime minister who first introduced GST in 1999 with a vision of united India and one tax. While launching the new tax reform, Modi said, “The GST has united country the way Sardar Patel had done post-independence.”

The statement assumes great significance as the GST is a true symbol of united India and cooperative federalism. Vajpayee dreamt of a new tax on the same lines, a single tax system for the economic integration of India. He was so serious about it, and hired MIT-trained economist Asim Dasgupta, the then finance minister in West Bengal’s Communist government to devise the route map for GST.

That was the beginning, and Dasgupta did some excellent work. The subsequent Manmohan Singh government was open to this as the economist-turned-prime minister was of the opinion that the GST would become one of the biggest reforms in the country’s history.  

The debates went on and on. The UPA government failed to implement the GST in their two terms, they made it crystal clear that they had no interest in addressing the tax problem with the consensus of all stake holders. And, finally it is a twist of fate that another BJP prime minister is fulfilling the dream of India’s first BJP prime minister.

But, the Congress party is annoyed, and it’s evident in their Twitter post, "How many Indians will suffer because of the haste of the BJP?” However, it’s not a genuine concern; it’s just its political immaturity amid the election disasters.

Also read: Why we should be patient with GST


Dipin Damodharan Dipin Damodharan @dipinbharath

The writer is co-founder of EduQuest and Ex-Editorial Head, DC Media, DC Books.

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