VAT a farce

There was another editorial along with the column mentioned in my previous post in yesterdays' Economic Times hardcopy, but the Economic Times website - which along with TOI's has to be one of the worst designed ones - seemed to be missing it. Some bits from it below. It takes a bigger hammer to the BJP. For instance:

The decision of the five BJP-ruled states to not join the rest of the country in switching over to a system of value-added taxes at the state level is yet another example of the political rot that holds up India's development.

How times change - from architects of a effulgent India to stubborn obstructionists. Not everyone is going along though - Naveen Patnaik seems to have decided, according to the article, 'not to join his allies in thwarting this key tax reform". What seems so sad is that it was the previous government which set the ball rolling.

...it was Mr Yashwant Sinha of the BJP who set up the empowered committee of state finance ministers to prepare the groundwork for a nation-wide switchover to VAT ... Marxist-ruled West Bengal's Dr Ashim Dasgupta was chosen to head that committee set up at a BJP Union Finance Minister's instance and comprising ministers of states ruled by the Congress and other political parties ...the empowered committee of state finance ministers did bring out a viable roadmap but the BJP leadership chickened out at the last moment and deferred implementation...

I confess to not knowing much about VAT except what I have read in the papers. But I do know that a significant reason for traders not paying taxes currently is apparently the cascading effect of taxes at various points leading to ridiculous tax rates. This problem will be solved by introduction of VAT, again going by the papers. So the traders can now start paying taxes and still not be hurt too badly. When the governments are so strapped for cash, it is only commonsense that everyone do their bit to help things along. But the name of the game is politics.

I also confess to not being a big fan of Mr Modi. But this is a bit thick. He could have at least given a better reason to skip his party's chief ministers' meeting on VAT. From this report, here is the relevant extract:

Gujarat Chief Minister Narendra Modi could not attend the meeting as he was busy preparing for Sunday’s ‘Swabhiman Rally’ in Ahmedabad to protest cancellation of his visa by the USA.

He could have said "Hell, nothing new is going to come out of this meet, I already knew the BJP states are not going to implement VAT now, so to hell with the meeting" - that would have been acceptable. But to protest cancellation of a visa by the US? Not good.