Don’t show bias against Andhra Pradesh: TDP MP Galla Jayadev to Centre

Galla Jayadev said that AP is the loser to the tune of Rs 2,600 crore per annum due to the implementation of GST, because from a producing State, it is now reduced to a consuming State.

TDP MP Jayadev Galla speaks in the Lok Sabha on no-confidence motion during the Monsoon session of Parliament in New Delhi on Friday July 20 2018. (Photo | PTI)

VIJAYAWADA: Accusing the Centre of adopting double standards, TDP MP Galla Jayadev questioned how could the Centre deny Special Category Status (SCS) to AP, while extending the same to North Eastern States.

Participating in the debate on GST Amendment Bills in the Lok Sabha on Thursday, Jayadev sought to know what Clause 11 of CGST Bill says? It proposes to amend Section 22 of the CGST Act to enhance the aggregate turnover at the request of a Special Category State on the recommendation of the GST Council, he said and pointed out how could the Union Finance Minister mention that henceforth no benefits would be given to SCS States once GST was implemented.

Recalling that the Union Commerce Minister recently said in the Lok Sabha that the North East Industrial and Investment Promotion Policy would be extended to the North Eastern States till 2022, he said the Union government extended Central assistance and incentives to the SCS States in August 2017 and also the new industrial incentive package to North Eastern States in March 2018. He demanded that AP be brought under the purview of Article 279A to provide SCS to the State as promised at the time of bifurcation.

“The Government of India has given nothing to AP post-GST implementation. If we look at what you have given pre-GST, they are not exclusive to AP alone. It has been given to all the 150 backward districts in the country. Nothing unique has been given to AP. Secondly, if you look at Section 94(1) & (2), it clearly says that GoI should give tax incentives to promote industrialisation and economic growth. But, what you have given is just 15 per cent higher additional depreciation and 15 per cent investment allowance that too only to seven backward districts of AP. You have not extended this to even backward mandals in the remaining six districts of AP. Secondly, you have turned off your face from what we have asked. How can we support these Bills when we are not included as part of your assurances? You want us to pass these amendments and support rest of the country when you are not supporting AP,” the TDP MP said.

Realty business hit in AP post GST: TDP MP

"When GST was introduced, a rosy picture was given that there would be real estate boom, which results in employment opportunities and increase in economic activity. It proved to be a damp squib not just in AP, but across the country. There is 12 per cent GST on the cost of a flat and if you calculate registration charges, it comes to 20 per cent. If one buys a flat for Rs 50 lakh, the tax liability is Rs 10 lakh. How can real estate revive with this huge tax liability? I request you to bring down GST to 5 per cent to promote growth of realty sector, said MP Galla Jayadev."

‘Andhra Pradesh is the real loser’

Stating that AP is the loser to the tune of Rs 2,600 crore per annum due to the implementation of GST, because from a producing State, it is now reduced to a consuming State, Galla Jayadev said, “Of course, the Union Government is compensating this, but not totally. Secondly, the Centre compensates only for five years. So, what will be the fate of my State after five years, because even after the award period of the 14th Finance Commission, Andhra Pradesh will be the only major State in the country with revenue deficit? Thirdly, how can you justify compensating AP only for first five years when it is reeling under severe financial crunch due to undemocratic and unscientific bifurcation? So, I demand, and I am sure many MPs support me as their States are also in a similar position, to increase the period of compensation to the States from 5 to 10 years.”

The TDP MP said, “The second part is how AP is deprived of the GST benefit. There is no doubt due to dynamic leadership of our Chief Minister N Chandrababu Naidu, we have done well under GST. However, our average revenue is only Rs 1,461 crore per month with a population share of the undivided State of 58%. The average revenue of Telangana is Rs 1,740 crore per month with a population share of 42% of the undivided State. Our revenue could have been higher had the AP Reorganisation Act was drafted in a fair and equitable manner."

He added that: "The Reorganisation Act says that arrears of revenue to go to the State where the dealers have been registered as on the date of bifurcation and most of the dealers were obviously registered in Hyderabad and refunds burden to be shared by the successor States in the ratio of population. Due to the provision, we have lost a minimum of Rs 3,000 crore. We lost the advantage of having a well-developed capital like Hyderabad, which provided most of the tax revenues of undivided State. AP doesn’t have the advantage of high consumption in view of low per capita income and the absence of metro cities. Hence, the revenue deficit issue of AP should be taken care of as it is not possible through GST route.”