Pro-GST Arguments Based on Econometric Frauds: Prabhat Patnaik

Prabhat Patnaik says that the implementation of the Goods and Services Tax would mean that the states would have absolutely no power in deciding what tax rates to impose on what commodities, a right that was given to them under the Constitution of India.

Once you have the GST, the freedom of the states to pursue alternative strategies goes, and you have an enormous centralisation of power. If you want any change in the rates, you have to go to the GST council, in which the centre has a substantial voice. Consequently the states would become completely dependent on the centre. It is violative of the federal structure of the Constitution and is against the basic structure of the Constitution.

All kinds of ridiculous figures, like it is going to add 2 percent to our GDP growth rate and so on are bandied about which are based on econometric frauds, based on assumptions which make no sense whatsoever.

GST is a demand of the corporate elements in the country. The State governments are being bought off by promises that your resource position is not going to worsen in the short run.