How GST Fosters Better Economic Integration Between Jammu And Kashmir And India

No one had ever expected that Jammu and Kashmir, which enjoys separate status under the Article 370 of Indian Constitution and absolute power of taxation under Section 5 of the Jammu and Kashmir Constitution, could be brought under “one nation, one tax” regime. But, it has happened.

It happened on 7 July, when President Pranab Mukherjee gave his nod to an order pertaining to the implementation of the Goods and Service Tax (GST) regime in Jammu and Kashmir. This order cleared the decks for the state assembly to adopt the 101st Constitutional Amendment and enacting a State GST law.

The state government acted promptly and adopted it the same day, notwithstanding the fact that the new law rendered Section 5 of the Jammu and Kashmir Constitution ineffective for all practical purposes. While other states of the union draw their power to tax from Article 246 of the Indian Constitution, Jammu and Kashmir draws it from Section 5 of its own constitution.

With the Constitution (Application to Jammu and Kashmir) Amendment Order, 2017 on GST, an important chapter has been opened in the history of centre-state relations – a chapter that has completely integrated the state with India in economic terms.

Finance Minister Arun Jaitley on 6 July rightly said, “After historic andolan (agitation) by Syama Prasad Mookerjee, the country was united politically, but its economic integration took place only after historic approval of Jammu and Kashmir Legislature to the GST.”

“Jammu and Kashmir Legislature nod to GST yesterday (5 July) has resulted in economic integration of the country, which was never there earlier during past 70 years despite political integration, which was completed after Jan Sangh veteran Syama Prasad Mookerjee’s agitation, whose birth anniversary falls today (July 6).” said Jaitley at a function in New Delhi marking the birth anniversary of Mookerjee, who played a major role in integrating Jammu and Kashmir into India politically, constitutionally and financially.

More significantly, Jaitley also made a startling revelation that he had confronted Chief Minister Mehbooba Mufti with a choice between separatists and the people of Jammu and Kashmir.

“I wrote to Mehbooba Mufti that goods would become costlier (if you don’t implement GST). So, you have to choose the path of either going with the separatists or thinking the welfare of the people of the state,” said Arun Jaitley.

I will not cross the line if I say that what Arun Jaitley wrote to Mehbooba Mufti was a sort of warning.

Earlier on 23 June, Bhartiya Janata Party (BJP) leader and Deputy Chief Minister Nirmal Singh had threatened that the “BJP will pull out of the Government if the 101st Constitutional Amendment was not adopted.”

The process to adopt the GST, effective from 1 July throughout the country barring Jammu and Kashmir, was started on 7 June, when the coalition government of Peoples’ Democratic Party (PDP) and the BJP endorsed the GST Bill.

It convened a special session of the Jammu and Kashmir Legislature on 17 June to adopt it, but with no result. For, the main opposition National Conference, the Congress, the CPI-M and all other lawmakers from the valley, like separatists of all varieties, Kashmiri business leaders, civil society groups, Kashmir High Court Bar Association and Kashmiri opinion leaders, opposed the GST bill tooth and nail.

The upshot of their whole argument was that the GST, if adopted in its original form, will erode the state’s fiscal and political autonomy.

The opposition created a scene in the assembly. With the result, the state government couldn’t adopt the Bill. It could have adopted as it had the required numbers in both the Assembly and the Legislative Council, but it didn’t do that saying it wanted to create consensus among all the “stakeholders”.

In between, Chief Minister Mehbooba Mufti convened two all-party meetings to bring the opposition on board, but all these exercises failed to produce the desired result.

The Opposition and separatists didn’t budge from their stand. Instead, they all did their best to vitiate the atmosphere in the already restive Kashmir valley by seeking to convince the gullible Kashmiri Muslims that the PDP was all out to barter Kashmir’s autonomy to retain control over power.

So much so, on 5 July, when the special session of the Jammu and Kashmir Legislature was on to discuss the official resolution on GST, Kashmir observed blanket shutdown on the call given by the Kashmir Chamber of Commerce and Industry (KCCI).

That day, two PDP top leaders made some very politically significant and highly meaningful statements while speaking on the resolution on the GST in the Assembly. Jammu and Kashmir Finance Minister Haseeb Drabu said, “Article 370 of the Constitution of India was an obstruction to the development and progress of the State.”

On the other hand, PDP MLA from Baramulla and brother of former Deputy Chief Minister Muzaffar Hussain Beigh, Javed Beigh, said that the GST, if not adopted, will lead to the trifurcation of Jammu and Kashmir. “If you make GST Jammu versus Srinagar versus Ladakh, then we are heading towards a split,” he said while taking on Omar Abdullah.

To corner Omar Abdullah, Beigh said, “Those who abuse the Indian Parliament and Prime Minister are not the well-wishers of Kashmir and even former Chief Minister Omar Abdullah had once said that ‘whatever we will get, it will come from the Government of India, Indian Parliament and the Union Cabinet.”

The adoption of the resolution on the GST evoked a reaction on expected lines. The Leader of Opposition and working president of the National Conference(NC) Omar Abdullah dismissed with contempt the resolution as a “sham”. He also accused the Chief Minister of eroding the state’s fiscal and political autonomy for the sake of her own personal interests and to please her new masters in Delhi and Nagpur. So much so, the NC core group met and decided that the NC legislators would boycott the remaining session on GST as a mark of protest against the government’s machinations to trample the aspirations of the people by demolishing the state’s special status”. The meeting was chaired by party president and former chief minister Farooq Abdullah.

Congress, the so-called party of national character and which itself was a party to the 101st Constitutional Amendment, termed 5 July as a “black day” in the political history of Jammu and Kashmir. “The government was behaving like Pirs (spiritual guides) when they were acting like thieves and burglars using legislature as their back door to rob the state of its special status. They will inform the House on 6 July that they do not want to be part of blackening of democracy. We will question the government why they slit the throat of democracy with utter disregard to the opposition’s concerns of protecting the special identity of the state by deciding to implement GST without any safeguards,” said Jammu And Kashmir Projects Construction Corporation chief Ghulam Ahmad Mir.

Separatists and all others in Kashmir, who had been opposing the GST, described the adoption of the resolution as an onslaught on the state’s fiscal and political autonomy and said that “Article 370 has been reduced to an empty shell.”

As for Jammu where all the business and civil society groups had swung solidly behind GST, the response was one of overwhelming satisfaction. All welcomed the extension of the GST to Jammu and Kashmir. Earlier, the Jammu Chamber of Commerce and Industry (JCCI) and other premier business organisations, which had held some demonstrations in support of GST, had warned that they would enforce indefinite shut down in case GST was not adopted. They had also approached Prime Minister Narendra Modi to urge him to bring the state under the GST regime, saying the business and industry would “cripple” in case the state was kept out of the ambit of GST.

In sum, it can be said that the extension of the GST to Jammu and Kashmir has brought the state closer to Delhi than ever before. The most significant aspect of the whole situation after 5 July is that Kashmir has not witnessed any protest on the issue of GST. This should be reason enough for the Government of India to remove from the Indian statute book Articles 370 and 35-A so that there is a complete constitutional integration of Jammu and Kashmir.