New Delhi: India’s main opposition—the Indian National Congress—will scrap the current structure of goods and services tax and adopt a single GST rate if it wins Lok Sabha Elections 2019, people with knowledge of the matter said.
The Congress, led by Rahul Gandhi, will pledge in its manifesto to merge five different GST rates into one pegged at 18% as it prepares for polls slated to run from 11 April to 19 May, the people said, asking not to be identified citing rules for speaking with the media. The Congress has been critical of the current GST regime adopted by Prime Minister Narendra Modi’s administration.
Modi’s Bharatiya Janata Party-led coalition government launched the country’s biggest tax reform since independence on 1 July 2017, replacing more than a dozen levies to create a single market with 1.3 billion consumers. The government has been cutting GST rates on some goods and services in a move to revive consumption and boost the economy.
Sushmita Dev, a spokeswoman for the Congress party declined to comment.
Union finance minister Arun Jaitley, who leads the GST Council that adopted a five tax slab structure, has said a single GST rate can’t work at the moment, but the nation may further simplify the tax regime and eventually move toward a single GST rate.
The party will also pledge to provide a federal youth unemployment allowance, the people quoted above said.
Modi has been criticized by the opposition for not fulfilling his promise of creating 10 million jobs each year—a promise that won him the hearts of India’s youth in the 2014 Lok Sabha elections. In the absence of timely and credible data, it’s difficult to estimate the number of jobs created during Modi’s term.
Separately, the Congress is likely to pledge a one-time farm loan waiver and focus on “have nots" in a bid to win voters. The party will also promise a minimum income guarantee to the poor, said M.V. Rajeev Gowda, convener of the panel drafting the Congress’s manifesto, in February.