MORE than anything else, it is Prime Minister Narendra Modi’s repeated and uncharacteristic observations on Goods and Services Tax (GST) since the middle of October that reveals the political impact of the “historic economic reform” initiated by the National Democratic Alliance (NDA) government on the stroke of midnight on July 1, 2017.
This series of statements began at the Gujarat Gaurav Mahasammelan (Gujarat Pride Conclave) in Gandhinagar on October 16 and continued through several other public appearances in the following days. The central argument in the Prime Minister’s repeated assertions was that the introduction of the GST regime was a collective decision of all political parties and State governments and that the Centre only played a small part in the decision-making process.
Elaborating on the argument, he said: “All political parties, including the Congress, took the decision to bring in GST. You are all partners in this decision. The Central government is only a 30th part in the entire GST Council. I had said it is a new tax regime and I will review it after three months. And we not only reviewed it, but are trying to resolve all ticklish issues and all gaps relating to it. I assure our huge trading community that the government is committed to ensuring they have no problems because of the new reformist tax regime. Thousands of new traders have come up to join the GST regime but are seeking simplicity in its implementation. I have given my word to the traders that I will not allow them to suffer. Nobody is against GST, they all want that there should be no hurdles in its implementation. We are seized of it and I am continuously making suggestions to address all concerns.”
Several aspects of these pronouncements stood out in contrast to Modi’s normal style of speechifying, which is usually marked by self-aggrandisement and claims of great achievements and triumphs in various fields. The Prime Minister is also known for running down political adversaries in his speeches. But the tone and tenor of the GST-related references were conspicuously defensive, and while adopting this posture Modi also sought, rather bluntly, to apportion credit or blame, whichever way one wanted to see it, to his political associates and adversaries. What he wanted to convey through all this was evident. It was just that the responsibility for the mess in trade, industry and agrarian sectors caused by the new tax regime and its implementation cannot be placed solely on him or his government and the Bharatiya Janata Party (BJP). The fact that he had used all sorts of venues to advance these points also flagged a sort of desperation that Modi supposedly does not display under normal circumstances. While the first of the defensive expositions was obvious at the Gujarat Gaurav Mahasammelan, a massive gathering of BJP workers organised as part of the campaign for the Gujarat Assembly elections scheduled for December, many later presentations were at government functions, with no overt dimension of party politics.
This atypical urge to present himself and his government as the second fiddle as well as the unusual apportionment of equal responsibility to his political adversaries did not go unnoticed by political observers and opposition leaders. Shivanand Tiwari, the Rashtriya Janata Dal (RJD) leader and former Rajya Sabha member from Bihar, describes this new role-play by Modi as a political act, devious and amusing at the same time. “Here is a man who, in the run-up to Lok Sabha elections in 2013-14, unabashedly took the credit even for Amul Dairy [or Kaira District Cooperative Milk Producers’ Union Limited in Anand, Gujarat], the dairy cooperative that was set up in 1946 and nurtured as a successful model since the 1970s under several regimes, including the Congress. Modi was Chief Minister of Gujarat only from 2001 to 2014, but he had no qualms about claiming credit for the dairy cooperative movement. So, now, when he says that you are all partners in this decision and that his government is only one-30th of the decision-making system on GST, there is little doubt that it is driven by a realisation that the political challenges thrown up by the new tax regime and its implementation are indeed grave.”
Tiwari’s observation had a resonance across the opposition political spectrum and among a large number of political observers.
Samajwadi Party (S.P.) president and former Uttar Pradesh Chief Minister Akhilesh Yadav told Frontline that “the realisation about the grave political dangers unleashed by GST and its implementation must have become stark on account of the forthcoming Assembly elections in Gujarat, a State with a significant trading community. Traders of the State are already up in arms, rather militantly, against GST and its proponents and implementers, the BJP and its government.”
Widespread anger Travelling across several districts of Uttar Pradesh, the country’s most populous State, Frontline could deduce that the antagonistic responses are not confined to election-bound Gujarat. All sections of the population, including traders, industrialists, salaried employees, daily-wage earners and farmers, minced no words in expressing the hardships they had suffered over the past one year, not only on account of GST, but because of the cumulative problems that followed the “historic economic initiative of Modi”, demonetisation. The condemnation of the demonetisation-GST continuum cut across social and political barriers, with people belonging to all communities and political affiliations squarely terming both moves as disastrous. Significantly, even supporters of the BJP and other outfits of the Rashtriya Swayamsewak Sangh (RSS)-led Sangh Parivar, in trade, industrial and agricultural bodies, were critical of the demonetisation-GST continuum.
While most of the BJP-Sangh Parivar supporters who expressed anger and exasperation at the two economic initiatives wished to remain anonymous, Pandit Shyam Bihari Baijnath Mishra, a four-time BJP Member of Parliament from Bilhaur constituency in Uttar Pradesh, came on record making a forceful case against GST and demonetisation. Mishra, who is also the national president of the Bharatiya Udyog Vyapar Mandal, the apex body of traders and small industries, told Frontline that promises made before and during the advancement of both the “revolutionary” economic initiatives had been completely belied. “When GST was launched Modi ji had promised four things. First, there would be a uniform tax structure across the country. Second, it would remove corruption and prevent generation and circulation of black money. Third, the harassment of traders by high-handed officials would come to an end. Fourth, all trade in the country would be documented and receipted. Now, as we see the implementation of GST, not one of these promises is being fulfilled,” he said.
Explaining each of his points, Mishra added: “The promise of uniform tax structure has become a joke with the Centre and different States pulling in different directions with umpteen interpretations. If anything, the rate of corruption has doubled and, with rampant attempts by a large number of people to get below the radar of this confusing and oppressive tax regime, black money is in circulation with a kind of renewed vigour. When demonetisation was rolled out, there were claims that it would help digitise the economy and thus curb black money. Every day, we are hearing stories of old and banned currency being transported from one part of the country to another. Where is all this black money going? Who is helping its circulation and legitimisation? And given our striking infrastructural deficiencies, is it possible to fulfil the digital requirements demanded by the GST regime? As president of the Bharatiya Udyog Vyapar Mandal, I have been trying to flag many specific issues relating to this rollout, but unfortunately, the listening quotient of the government, especially Finance Minister Arun Jaitley, is very low. I, and my associates in the Mandal, had pointed out 62 specific anomalies in the GST structure and demanded rectification. Just 12 of them have been accepted. I am certain that the government will have to come around and accept the other 50, too, because they are legitimate demands, strong on facts and reasoning. But every genuine demand is addressed with extreme laxity while arbitrary and ill-thought-out directives emerge out of the big officers of the government. Modi ji will have to address all this at the earliest and put the government back on track.”
Asked how he was openly criticising the government while most of his colleagues in the BJP as well as a large section of traders were wary of saying anything critical of Modi and his team, Mishra said as a loyal praja (citizen), it was his duty to inform the raja (king) of the atmosphere as it existed on the ground. “Lord Rama had the dhobi [washerman] who informed him about what people were talking about Sita maa . I am like that dhobi . I am telling Modi ji what is happening on the ground. I think that like Lord Rama, Modi ji will listen to the good counsel of the people and adopt course correction measures.”
Mishra said he hoped Modi and his team would get back to positive leadership, keeping the interest of the people paramount.
Some of his associates in the BJP and the Bharatiya Udyog Vyapar Mandal pointed out that the messy implementation of GST and demonetisation had pushed back the new political thrust advanced by the Modi-Amit Shah duo since 2014-15.
Old support base sidelined A perceptive associate of Mishra in the Bharatiya Udyog Vyapar Mandal said: “The political moves that followed the announcement of demonetisation, including the manner in which the Uttar Pradesh elections were fought, had clearly underscored a political-organisational line that sought to sideline the old support base of the BJP consisting of upper-caste Brahmins and Banias [trading community] and promote a combination of non-Yadav Other Backward Classes [OBCs], Most Backward Class [MBC] communities and the non-Jatav Dalit communities. It was a different kind of social engineering, which attempted to project the party as something closer to the poor and the marginalised as opposed to the middle class and the middle trader. The communities that rallied around the party as part of this project included OBCs such as Kurmis, Shakyas, Lodhs and Pals, and MBCs such as Mauryas, Nishads and Rajbhars, and Dalit communities such as Pasis and Valmikis. Informal estimates are that these communities together account for nearly 25 per cent of the population of Uttar Pradesh across 38 caste blocs, with over 200 sub-castes and groups. This worked very well in the Uttar Pradesh elections of March 2017. However, the mess and the unending economic hardships inflicted by the two economic drives are now increasingly alienating these poorer classes from the BJP. Evidently, this situation presents an opportunity for the now-disparate mainstream and regional opposition parties, including the Congress, the Left parties led by the Communist Party of India (Marxist), the S.P., the Bahujan Samaj Party (BSP), the RJD, the Dravida Munnetra Kazhakam (DMK) and the Nationalist Congress Party (NCP), to build a campaign on core economic issues and make it an effective anti-government political weapon.”
He added that the lack of leadership within the opposition ranks need not become a hindrance to the success of this campaign. “The most important thing is how effectively they marshal their arguments and master the situation,” he said.
Mishra’s associate added that if the opposition was able to put up a strong and effective campaign on these lines, the Modi-Amit Shah duo, along with other leaders of the BJP and the Sangh Parivar, may only have the option of propping up an aggressive Hindutva rhetoric to create a communal divide in the name of the Ayodhya Ram temple or some other polarising issue. Clearly, there are some new political straws in the wind and a realisation about this is spreading among the grass-root workers, beyond conventional, social and political divides.
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