J&K, a state which is
notorious for only wrong news lately, etched its place for ever in Indian economic
history on 19th May, 2017. The GST council which held its 14th
meeting in Srinagar cleared almost all hindrances for finalization of 1211
commodities under different tax slab of 0%, 5%, 12 %, 18 % & 28 %.
It’s
tough for a person sitting outside Kashmir to imagine how the biggest indirect
tax reform got cleared so easily. A state which is perceived as offering
fragile political system goes much beyond being a centerpiece for economic
reforms; and it is the political economy of this historic moment which makes it
such a game changer.
The
consensus built on this litigious issue by GST Council assures that J&K is
an integral part of the key Indian economic reforms. It has offered an apt platform
to both Modi and Mufti Government to try to modify the current status of
affairs- which at present seems to have nothing but destructive consequences
for an already fragile economy whose per capita debt is at an all-time high.
Ministers
of 24 other states who participated in the 2-day deliberations echoed the same
sentiment- The situation is far better than what they saw on TV
Karnataka’s
agriculture minister Krishna Byre Gowda who was a part of GST council meeting, admitted
his change of perception on Kashmir. In a panel discussion hosted by Mint, Mr.
Gowda said, “The impression you get from outside the valley is that large
incidents of disturbances are prevailing; at least that is the image the media
has given us. I am not denying that there are no incidents. But for the most
part actually life seems normal. Before (coming here) I was questioning the
wisdom of holding the GST meet in the middle of so-called disturbances.”
Second,
Mufti government kept on the momentum which was built in previous 13 deliberations,
thus adding some boost to the ever-evolving pattern of federalism. Both State
& Central Government had to let go some of their sovereignty but more or less
stuck to the party line: India First. This new federal polity, riding on the
bonding the finance ministers struck during the GST journey, augurs well for
India.
Political
will of Srinagar to implement GST will be a giant step forward. Not only the policy of real-time monitoring of
transactions will scare tax evaders but the reform will also speed up the formalization
of the informal economy. Such policies would contribute towards generating a
faster sense of inclusivity among Kashmiris.
GST
reforms should increase number of tax payers in J&K resulting in more money
with the state treasury and thus more development and welfare schemes for
Kashmir.
