Political analyst Prashant Kishor said the third term of Prime Minister Narendra Modi could see petroleum being brought under the Goods and Services Tax (GST) and significant curbs on the financial autonomy of states.
In an exclusive interview with India Today, Kishor predicted structural and operation changes to the anti-corruption narrative of the Modi government.
"I think the Modi 3.0 government will start with a bang. There will be more concentration of both power and resources with the Centre. There might also be a significant attempt to curtail the financial autonomy of the states," Kishor said.
Kishor, who managed Narendra Modi‘s campaign in 2014, said there was no widespread anger against the Prime Minister and the BJP would win around 303 seats.
The political strategist said states currently have three major sources of revenue — petroleum, liquor and land. "I wouldn’t be surprised if petroleum was brought under GST’s ambit," Prashant Kishor said.
Presently, petroleum products like petrol, diesel, ATF and natural gas are outside the ambit of GST. However, they still attract taxes like VAT, Central Sales Tax and Central Excise Duty.
While bringing petroleum products under GST has been a long-standing demand of the industry, states have been averse to the idea as it would result in a huge loss of revenue. Bringing petrol under GST will make the states further dependent on the Centre to receive their share of the taxes.
Presently, the highest tax slab under the GST is 28%. Fuels such as petrol and diesel are taxed at more than 100%.
He also predicted that the Centre could delay the devolution of resources to states and make Fiscal Responsibility and Budget Management (FRBM) norms tighter. The FRBM Act, enacted in 2003, puts a cap on the annual budget deficits of states.
"The centre may delay the devolution of resources and off budget borrowing of states will be made tighter," Kishor predicted.
Kishor also predicted that India’s assertiveness will increase while dealing with geopolitical issues.
"At the global level, India’s assertiveness will increase while dealing with countries. There is chatter among diplomats of an aggressive Indian diplomacy bordering on being arrogant," he said.
A I R I E F Website 