Tamil Nadu Opposed GST On Food, Says State Finance Minister

Tamil Nadu Finance Minister Dr Palanivel Thiaga Rajan has refuted Union Finance Minister Nirmala Sitharaman's claim that state governments did not oppose the Centre's levy of 5 per cent GST on branded food products including curd and lassi, which has resulted in a price hike of these food items.

Dr Thiaga Rajan claimed that Tamil Nadu had opposed this at the very first stage. "An IAS officer had given a written submission opposing this," he said.

"Although I am not part of the Group of Ministers, I had sent a written submission opposing this to the GST sub-committee, the Group of Ministers too," he added.

In a video message, Dr Rajan said there was no discussion at all on the controversial decision.

"Fifty-six such recommendations for rate rationalisation either raising or lowering rates were offered together and asked to either agree with all or disagree with all... It was in this situation, amid want of time, the Council agreed to this," he claimed.

Responding to Ms Sitharaman's criticism that the state government had not fulfilled its poll promise to cut fuel prices -- petrol price by Rs 5 a litre and diesel by Rs 4 a litre -- Dr Rajan argued that the DMK on assumption of power, had cut petrol price by Rs 3 a litre on its own, even before the union government initiated any cut.

A further tax cut of Rs 1.95 a litre was passed on to consumers following the Centre's cut.

"We could have kept it to ourselves through an Ordinance, but we did not do it," he said.

On the question of unfulfilled diesel price cut, he added, "We've come half way. In the case of diesel, we have increased subsidy to fishermen and such groups".  

Claiming Tamil Nadu's fiscal deficit is just 3.5 per cent versus Union government's 7 per cent, and the state's inflation at 5 per cent versus 8 per cent nationally, Dr Rajan said: "Tamil Nadu has also achieved great growth till July 31 compared to last year and they are not able to tolerate our good management. We are twice better than the centre. Ours is an example of results when a good leader performs. I feel they target us for this."

Taking on the GST system, Dr Rajan said it is a wrong model, with the Centre alone having 33 per cent and 75 per cent votes would suffice to pass any resolution.

Other states have just around 2 per cent votes, he said. So any resolution that the Union government opposes, will fail immediately. A resolution that the Union government brings can be stopped by states only if at least 12 states get together.

"The problem is states that depend on the Centre's funds for their budgets he says endorse hike in taxes. It is difficult to get together larger tax contributing states like Tamil Nadu that don't succumb to the BJP," he added.

Responding to a question on why increasingly Tamil Nadu is targeted and discussed in parliament, the Finance Minister said it is because he is raising the very same questions that Prime Minister Modi had raised when he was the Chief Minister of Gujarat.

"He had then demanded that the Centre should not snatch away the rights of states. Now all states are disturbed and ignored. Like a ruler from Delhi they want to rule all states. They want us to be slaves. It is like a new colonial power that sits in Delhi and decides everything.  School education is a state subject, they bring New Education Policy, agriculture is state subject but they enact three laws ," he added.