India’s Main Opposition Is Said to Pledge Single Sales Tax Rate

Rahul Gandhi

Photographer: T. Narayan/Bloomberg

India’s main opposition Congress party will scrap the current structure of goods and services tax and adopt a single rate if it wins next month’s federal
, people with knowledge of the matter said.

The Congress party, led by Rahul Gandhi, will pledge in its manifesto to merge five different GST rates into one pegged at 18 percent as it prepares for polls slated to run from April 11 to May 19, the people said, asking not to be identified citing rules for speaking with the media. The Congress has been critical of the multiple tax rates in 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 July 1, 2017, replacing more than a dozen levies to create a single market with 1.3 billion consumers. The government has been
cutting tax
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.

Finance Minister Arun Jaitley, who led the panel 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 rate.

The party will also pledge to provide a federal youth unemployment allowance, they 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
in the 2014 election. 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 party is likely to pledge a one-time farm loan write off 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.

Congress’ proposed pledges in its manifesto

  • Minimum income guarantee to poor
  • Unemployment allowance 
  • One-time farm loan waiver
  • One tax rate for GST
  • Employment guarantee plan for urban youth
  • Schemes benefiting landless farmers
  • Five hundred square feet house to poor
  • Measures to spur startup companies
  • Thirty three percent reservation for women in government jobs
  • New data protection and privacy law
  • New bill focusing on LGBTQ rights
  • Stand alone women empowerment and justice department

(Updates with unemployment allowance in fifth paragraph.)

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