NEW DELHI: The 25th Party Congress of the Communist Party of India (CPI) on Tuesday expressed serious concerns regarding the recently announced Goods and Services Tax (GST) 2.0 reforms, which came into effect on 22 September. One of the key resolutions adopted by the party Congress, held in Chandigarh, noted that without a credible compensation mechanism, a more progressive tax structure, and transparent governance, GST 2.0 risks repeating the shortcomings of the original rollout, achieving only partial administrative efficiency at the expense of fiscal stability, economic equity, and federal harmony.
“Evidence indicates that lower- and middle-income households bear a disproportionately high share of the GST burden, as they spend a larger portion of their income on goods and services subject to taxation,” the party stated.
The resolution highlighted fiscal sustainability as a major concern under GST 2.0.
While the rationalisation of slabs simplifies the structure, it is projected to result in a significant annual revenue shortfall, it added.
“The elimination of the GST compensation mechanism exposes states to cyclical revenue fluctuations, threatening the financial stability of governments that relied on this system to fund welfare programmes and infrastructure. Revenue shortfalls may compel both the Centre and states to reduce essential public spending or increase borrowing, undermining long-term fiscal prudence,” the CPI warned.
The party also described the Centre’s relief package of Rs 1,600 crore for flood-hit Punjab as an “insult” to the affected people, highlighting the widespread destruction and massive agricultural losses. Noting that actual losses exceed Rs 25,000 crore, the CPI demanded an expanded package to be released immediately, including at least Rs 100,000 in direct relief to every affected family, including landless labourers and small traders, not just farmers.
The resolution criticised both the central and Punjab governments for alleged negligence in maintaining irrigation and drainage systems, which “aggravated” the recent floods in Punjab.
Furthermore, the party emphasised the urgent need to achieve Universal Health Care (UHC), focusing on strengthening the public health sector, ensuring equity, and providing financial protection for all citizens.
The resolution called for health to be enshrined as a fundamental right in the Constitution.
“Increase public health expenditure to three per cent of GDP by 2027 and subsequently raise it to six per cent, with resources directed towards infrastructure, medicines, diagnostics, and human resources,” the document read.