If Telangana Chief Minister K Chandrasekhar Rao had hoped that his support to the BJP on issues such as demonstration, Presidential polls and the GST will be sufficient to buy peace and ensure quid pro quo from the BJP leadership and Central Government he was in for a big disappointment.
On the one hand, the Centre has only partially Telangana’s demand to exempt the ongoing development projects of the State Government from GST, and on the other BJP was gearing up to turn the political heat on the TRS by raising thrones and emotions issues including official celebration of Hyderabad’s integration in India.
While the Telangana Government had demanded no GST should be imposed on the State projects such as irrigation and housing projects the GST council has decided to reduce it from 18 per cent to 5 per cent revoking a strong disapproval from the CM. Soon after the GST Council’s decision was announced KCR adopted a strong stand and decided to write a letter to the PM. On his instructions officials of finance department prepared a detail report assessing the impact of 12 per cent GST resulting in a huge financial burden on the State finances and affect the development programmes.
The Centre had fixed the GST on the state programs at 18 per cent resulting in a tax burden of Rs 19,600 and following the recent decision it has come down merely by 7 per cent. The State officials suggest that if the GST on these programmes was reduced to 5 per cent, they will be able to save another 10,000 crore. As per the assessment of the officials the GST will cause a urgent of Rs 1,500 crore each on the irrigation project and double bedroom housing scheme. The tender process of many projects was also getting delayed as major contractors were apprehensive of GST and were not coming forward to take part in it.
After KCR threatened of confrontation with the Centre, union Minister of state Bandaru Dattayreya has assured the Chief Minister that the Centre will revise the GST rate shortly.
Following the assurance Chief Minister said that his Government will adopt a wait and watch policy as GST was an experiment. He told a meeting that several countries had adopt the uniform tax formula but withdrew it later due to the problems of implementation.
Chief Minister said that the success of the GST implementation will depend on how well the Centre addresses the concerns of the people.
This being so, a new round of trouble seems to be brewing between the TRS and the BJP. While it has become a annual ritual of sorts of the BJP to demand that the September 17 should be officially celebrated by the state as Hyderabad liberation Day marking the merger of Nizam dominion into Indian union through military action in 1948, this year the BJP has decided to organise a big public meeting to make the occasion and use it to kick off its early election campaign. To make it a high profile event the BJP President Amit Shah and many central ministers were likely to address the meeting.
BJP plans to use it as an emotional issue and force the TRS to celebrate the day officially.
These developments were likely to add new irritants between the two parties apart from pouring cold water on the plans of TRS to forge closer relations with Narendar Modi government.