NATIONAL: Rahul Gandhi Slams GST as Tool of Economic Injustice
A Critique of GST’s Economic Impact
Congress leader and Lok Sabha Leader of Opposition Rahul Gandhi has labeled the Goods and Services Tax (GST), now in its eighth year, as a mechanism perpetuating economic injustice and corporate favoritism. In a statement on X on July 1, 2025, Gandhi called for reforms to create a people-centric, business-friendly tax system that embodies true federalism. He argues that the current GST framework disproportionately burdens the poor and small enterprises while favoring select corporate entities.
Devastating Impact on MSMEs
Gandhi highlighted the severe toll on micro, small, and medium enterprises (MSMEs), noting that over 18 lakh such businesses have shuttered since GST’s inception in 2017. He attributes these closures to the tax regime’s complex compliance requirements, which overwhelm smaller entities lacking robust administrative resources. MSMEs, critical to India’s job creation, face existential challenges under this system.
Corporate Tax Breaks vs. Public Burden
The Congress leader pointed out a stark disparity in tax treatment, with citizens paying GST on essentials like tea and health insurance, while large corporations benefit from annual tax exemptions exceeding Rs. 1 lakh crore. Gandhi described this as a systemic bias, where bureaucratic complexities favor well-resourced corporates, leaving ordinary traders and small businesses mired in red tape.
Allegations of Anti-Federal Practices
Gandhi accused the central government of weaponizing GST dues to penalize non-BJP-ruled states, signaling an anti-federal agenda. He argued that this undermines the cooperative federalism GST was meant to foster, as originally envisioned by the UPA government to unify markets and simplify taxation. Poor implementation and political bias, he claims, have derailed this vision.
Call for a Reformed GST Framework
Advocating for a reimagined GST, Gandhi emphasized the need for a universal tax system that supports small shopkeepers, farmers, and other stakeholders in India’s economic progress. He urged reforms to reduce compliance burdens, promote equitable growth, and restore federal balance, ensuring the tax system serves the public rather than select corporate interests.
Broader Implications for India’s Economy
Gandhi’s critique underscores ongoing debates about GST’s efficacy and fairness, with its multi-slab structure and bureaucratic hurdles drawing scrutiny. As India marks eight years of GST, his remarks highlight the urgency of addressing systemic flaws to create an inclusive economic framework that supports both growth and equity.