‘Think 2019, don’t delay reforming GST’

The twin measures of demonetisation and Goods and Services Tax have dealt a blow to trade in Gujarat, particularly to the jewellery and textile industries. The textile business is down by 20% to 40%, a hit which smaller traders are finding difficult to bear.

Many in the business are angry, primarily because textile was earlier exempt from taxes—now it has a 5% tax—and then there is the additional burden of GST filing. Complaints abound about the GSTN site not working properly, wasting traders’ time and making them incur additional expenditure in hiring accountants to file GST.

Those in the jewellery business had participated in a 42-day-long protest after demonetisation. However, the government’s move to bring gems and jewellery under 3% GST, even lower than the 5% band, has soothed tempers to a large extent. The realisation has also hit home that Prime Minister Narendra Modi knows the inside out of how business—both textile, and gems and jewellery—is done in Gujarat and is serious about “mainstreaming” at least 50%-60% of the trade, which runs into thousands of crores.

The current tension is primarily emerging from a situation where PM Modi is trying to discipline these sectors, and a large section of traders unwilling to give up old ways of doing business. Ironically, from talking to a cross-section of traders what emerges is that these people, however angry, also realise that Modi is their man in Delhi, and they want him there.

In Ahmedabad, one keeps hearing, “Modi not being PM will be bad for the country.” Congress is not an option for most, even though some may break ranks and shift towards the “grand old party” in the Assembly elections. The common refrain in the state is that “we are not against the (Central) government, we are against its policies”.

From within the trading community itself attempts are being made to assuage the concerns of the smaller traders, with the assurance that mainstreaming their businesses will help them get out of the clutches of corrupt taxmen and other bureaucrats. Whether or not this works, will become clear only on 18 December, when the election results are declared. However, there is also general concern that the government is moving too fast. “It must go slow,” is another common refrain.