The Economics Department of the SPPU (Savitribai Phule Pune University) invited Lok Raj Sangathan to conduct a workshop on GST for its MA students on 28th February, 2018
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Right in the beginning the facilitator stressed that he would be looking at GST from the perspective of people. All the students in the workshop are people first and foremost. They are all citizens of India.
In a highly interesting and interactive way, the following points were brought out:
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All of us, whether we earn or not, pay taxes. By and large we do not know how much we pay by way of indirect taxes.
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GST is an indirect tax; indirect taxes are regressive because the poor end up paying a much larger fraction of their earnings as compared to the rich.
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Even direct taxes are regressive due to the exemption that the industrialists get. Warren Buffet, one of the richest Americans, has in fact admitted that he pays much less than the people who work for him. The same situation prevails in India as well.
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GST does not cover all the goods and services. About 30% – 40% of the GDP is not covered by GST. This includes major sectors like oil and gas, electric power, land a big chunk of real estate, liquor, etc. In fact, in the case of petrol, taxes of various kinds amount to more than half of its price!
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GST is to the benefit of the biggest industrialists. Smaller producers and retailers are going to be ruined in due course. This is going to lead to huge job losses.
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The maximum rate of GST (28%) is much higher than the maximum rates in other countries like France, UK, Ukraine, New Zealand, Australia, Vietnam, Singapore, Malaysia and Canada. The last named has a maximum rate of just 5%!
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If you thought that the highest GST rate is for luxury goods, you would be wrong! A commodity like cement, which is definitely a necessity, is taxed at 28%!
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GST is an entirely computer and internet driven system, which is going to ruin small producers and retailers faster.
At the end of the workshop one point was very clear – in economics, what is good for the biggest industrialists is bad for the working people! One student asked – “Don’t all the policy makers know that GST is going to affect the poor and working people very adversely? Then why have they done it?”
The facilitator said that it was a very good question, which deserved a very detailed reply. It is linked with who holds political power in our country. It is evident that despite what is claimed, in this “Democracy”, all of us do not have the power to make vital decisions and have them implemented. Power is concentrated in the hands of the richest of the rich. That is why there is need to organise for Lok Raj!
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