‘Gujarat Will Have To Work Harder In The GST Regime’

The Congress often cites ‘former Gujarat CM Narendra Modi’s opposition to the legislation for years’. States like Gujarat did, indeed, have misgivings about the GST Bill. Gujarat finance minister Saurabh Patel says all that is now in the past. The state, he says, was in sync with the national mood and keen to usher in GST — only it would have to work harder in the new tax regime.

Excerpts:

What are your views on the GST Bill that the Modi government hopes to pass into law in the monsoon session of Parliament?
The Empowered Group of finance ministers has unanimously said that we (the states) approve the basic tenets of the Bill and that the Centre could bring it in the coming session. Thus, from our side, there are no issues.

But like other manufacturing states, Gujarat had its concerns too, right?
We told the finance minister after looking into revenues and future avenues that compensation has to be given. He has agreed to a compensation for a period of five years. That issue is now resolved.

But what happens after five years?
The economy will grow in those years. There will be an ‘all sectorial growth’. I think a state like Gujarat will also have to work harder.

As chief minister, Narendra Modi had said that GST infringed on the rights of the state. You too had made similar observations. Are you sure that those concerns have been addressed?
Narendra Modi has never given any speech in any of the Empowered Committee meetings because he never was finance minister. I represented the state in such meetings. And this was the view of most states, including the Congress-ruled states. But this was before the first White Paper came. After the first White Paper, there were a lot of discussions. And then everything started falling in place. The states that had earlier raised objections, said they were okay with the idea. But this happened many years ago.

Did you hold talks with Maharashtra or Tamil Nadu, seeking a common ground?
No. The only discussion that we (the States) had was during the empowered group meeting. There was a limited interaction with Maharashtra during the Select Committee meeting in this part of the country. Many states like Haryana, Punjab and Tamil Nadu, took a position similar to ours.

The Congress has demanded that the one per cent additional levy that would have otherwise gone to manufacturing states, should go. The Union government is favourably disposed to the idea. Does that hit you?
That was for a period of two years. Had this one per cent (levy) been retained, the compensation for states like ours, would have been much less. Removing this one per cent will bring in Rs 30,000 crore to all the states that would have to be compensated. Once the Centre says that it was ready to compensate (the States) then there are no problems.

suman@businessworld.in