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LATEST NEWS UPDATES | States cannot be left to the Centre’s mercy -Praveen Chakravarthy

States cannot be left to the Centre’s mercy -Praveen Chakravarthy

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published Published on May 15, 2020   modified Modified on May 15, 2020

-The Hindu

Not only are the States not paid what is due to them, they have also lost the powers to raise their own sales tax revenues

Karur MP S Jothimani recently conducted a telephonic survey of 30 lakh people in Tamil Nadu on the re-opening of liquor shops in the State during lockdown 3.0. An overwhelming 89% were opposed to the move.

The Maharashtra government too decided to permit liquor shops to open but was quickly forced to reverse its decision in some parts of the State following protests. Similar protests against the sale of alcohol were seen in various States. This may be largely due to fears of crowding and the consequent spread of COVID-19 rather than about alcoholism and its potentially deleterious societal impact. Whatever may be the reason, it is clear that permitting the sale of alcohol during the lockdown is an unpopular move among the majority. Why then have popularly elected governments in nearly every State resorted to this move? The answer lies in what happened ‘at the stroke of midnight hour’ on July 1, 2017.

A triple blow

It is apparent that financially broke State governments are forced to adopt desperate and reviled measures such as opening liquor shops to mobilise money for their fight against COVID-19. The question is, even if they are strapped for resources, surely there must be other means to raise funds in this struggle to save lives than to prey on people’s alcohol addiction? Therein lies the rub.

All the States have come together like “pearls on a string” in the “spirit of cooperative federalism” for the economic integration of India, said Prime Minister Narendra Modi at the stroke of midnight hour on July 1, 2017 when he launched the Goods and Services Tax (GST). What was not mentioned was that the States on that “pearl string” were now stuck to the Centre’s neck forever. GST forced the States to surrender their powers to raise resources independently through local State taxes and place them entirely at the mercy of the Centre for most of their financial needs.

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The Hindu, 15 May, 2020, https://www.thehindu.com/opinion/lead/states-cannot-be-left-to-the-centres-mercy/article31585516.ece?homepage=true


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