Team Goemkarponn
PANAJI: Congress Leader Girish Chodankar today said that lack of tax autonomy is particularly detrimental for a state like Goa which thrives of tourism, fisheries and niche manufacturing.
“For a state like Goa, which thrives on tourism, fisheries, and niche manufacturing, the lack of tax autonomy is particularly detrimental. Goa cannot compete with industrialized states on economies of scale, as its small size and limited resources naturally constrain its manufacturing output,” said Chodankar
Instead, Chodankar said that Goa’s economic strategy relies on lowering taxes to attract investment and support local industries. Under GST, this flexibility has been removed, forcing Goa to adhere to uniform tax rates that do not account for its unique economic challenges.
The uniform GST rates fail to recognize that states are at different stages of economic and industrial development. Larger states with established manufacturing bases benefit disproportionately, as they can scale operations and absorb uniform tax rates more easily. In contrast, smaller states like Goa, reliant on services and specialized industries, find it harder to compete.
Dr. Manmohan Singh’s decentralized tax structure allowed states to adjust rates at various stages of manufacturing or service processes, promoting industries that aligned with their strengths.
“For example, Goa could incentivize tourism-related businesses or fisheries by offering lower taxes, thereby fostering economic growth in sectors where it has a competitive advantage. GST’s one-size-fits-all approach undermines this flexibility, stifling innovation and local entrepreneurship,” Girish Added
GST has also shifted the fiscal relationship between the Center and the states. While the GST Council is theoretically a collaborative body, in practice, it has often been criticized for favoring central interests. States have faced delays in compensation for revenue losses under GST, further eroding trust.
“This contrasts sharply with Singh’s approach, which emphasized dialogue and collaboration through institutions like the Planning Commission and National Development Council. Singh believed in integrating state priorities into national planning, ensuring that fiscal policies reflected the diverse needs of the federation,” he added
The GST model implemented by the Modi Government represents a departure from the federalism envisioned by Dr. Manmohan Singh. By centralizing tax powers, it has stripped states of their ability to support local industries and services, undermining their economic strategies and stifling regional innovation. For states like Goa, the inability to lower taxes to attract investment and foster local industries has compounded their economic challenges.
Dr Manmohan Singh ‘s ideology recognized that India’s diversity required a decentralized approach to governance, where states had the flexibility to address their unique challenges and strengths.
“The current GST regime, however, imposes a homogenized tax structure that disregards these realities, weakening the very foundation of India’s federal structure. If federalism is to be preserved, it is imperative to revisit the GST framework and restore states’ autonomy in taxation, ensuring that every state, regardless of size or capacity, has the tools to thrive,” he added
