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Resource centre on India's rural distress
 
 

Modi Government is on a Dangerous Course -Prabhat Patnaik

-Newsclick.in

The BJP government’s centralising tendency and its attitude towards the financial needs of states during this pandemic, is symptomatic of a thinking that will weaken the very foundations of modern India.

Despite repeated demands by the states, the Centre has still not released what is their legitimate due, namely, compensation for their revenue loss owing to the introduction of goods and services tax or GST; this has not been paid since August.

Meanwhile, the COVID-19 pandemic, while adding to the responsibilities of state governments, has dried up their revenues owing to the lockdown. The main sources of revenue now left to them, leaving aside GST, are taxes on petro-products and alcohol, and stamp duty. Since petro-product sales have plummeted during the lockdown, they can hardly hope to get anything from this source; likewise, with all alcohol shops closed during the lockdown, the revenue from this course, too, has dried up completely. And since this period of social distancing is hardly the time for people to be buying or selling property, the revenue from stamp duty has vanished.

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