It's taxing time for regional parties

The recent Assembly elections have been hailed as the coming of age of regional parties, whether it is the Trinamool Congress (TMC) in West Bengal or the Shiromani Akali Dal (SAD) in Punjab or the Samajwadi Party in Uttar Pradesh. Not only have these parties won convincing electoral victories, but have also become factors in political negotiation. They are now demanding that their voice be heard on a variety of economic issues ranging from the centre’s indirect taxes policy to foreign policy.

Uttar Pradesh Chief Minister Akhilesh Yadav demanded that the centre rollback the bullion duty and imposition of excise duty and TDS on bullion traders. The TMC has lost no opportunity in attacking its ally, the UPA, over issues that affect the ‘common man’ like rise in fuel prices.

However, in their own states, these regional satraps tend to implement the same policies which they have attacked the Centre for. The Nitish Kumar-led Bihar government has accused the Union Budget of being harsh on the common man, but the state government has not flinched from increasing electricity tariff by 19 per cent in the state.

NOT AGAINST TAX HIKE IN STATES
New tax policies implemented by state governments 

West Bengal 

* Introduced a new levy local area entry tax to create a compensatory entry tax fund for infrastructure

* Raised electricity tariff by 13 per cent 

Orissa

* Increased electricity tariff by 12 per cent

* Increased VAT from 4 per cent to 5 per cent on all consumer goods

* Introduced 5 per cent levy on sugar and textiles

Bihar 

* Increased sales tax on vehicles

* 10 per cent green tax on all vehicles that are more than 12 years old

* Increased VAT from 4 per cent to 5 per cent on all consumer goods

* Increased prices of milk 

In TMC’s first Budget in March, West Bengal finance minister Amit Mitra raised tax on a few luxury items; and also introduced a new levy, local area entry tax, to create a compensatory entry tax fund to build better infrastructure. Ironically, the TMC has bulldozed all central government’s proposals, which, in the former’s view, would ‘adversely impact the common man’. TMC chief and West Bengal Chief Minister Mamata Banerjee was vehement in her opposition to the recent rail fare hike and forced a rollback retaining only the increase in fares for first and second AC classes.

By imposing an ‘entry tax’, the Bengal Budget has not only set the ball rolling for a general price hike, but also for corruption at the point where the tax is collected, was the general view of a section of people.

In Orissa, the Naveen Patnaik-led Biju Janata Dal (BJD) government increased electricity tariff by 12 per cent across the board, both commercial and domestic. The state government has also increased VAT from four per cent to five per cent on all consumer goods. The BJD government has also introduced five per cent levy on sugar and textiles. Traders in the state have called for an agitation and have even threatened to stop the import of sugar and textiles from other states to protest the decision. As Orissa is not self-sufficient in sugar or textiles, this could lead to severe price rise, say political observers.

In Bihar, the BJP-Janata Dal (United) alliance government has increased sales tax on vehicles and introduced a 10 per cent green tax on all vehicles that are more than 12 years old. The Bihar government had also increased electricity tariff by 19 per cent last year, and energy minister Virendra Yadav has already claimed that another series of hike in electricity tariff may come soon. Nitish Kumar has also increased prices of milk in Bihar.