GST architecture: This Leftist got it right

As the nation waits with bated breath for the outcome of the GST Council meeting today to determine taxation on Covid essentials, we look back at the first Chairman of the committee to frame the tax, which was called the country’s biggest tax reform since Independence

  • Last Updated : May 17, 2024, 14:11 IST
Asim Kumar Dasgupta, first chairman of the GST Panel

Asim Kumar Dasgupta, who holds the record for being the longest-serving Finance Minister of an Indian state, was one of the silent architects of the Goods and Services Tax ,that has evinced such great public interest now.

Unifying the bewildering maze of the country’s disparate sales tax into a single tax was a Herculean task that Dasgupta was entrusted with.

He was the chairman of the GST panel for as long as 11 years and survived a change of regime at the Centre in 2004.

The bespectacled, clean-shaven, soft-spoken economist was selected as the chairman of the panel set up in 2000 to design the GST architecture.

Creating consensus

Though a member of the Communist Party of India (Marxist), Dasgupta was chosen by BJP leader and Prime Minister Atal Bihari Vajpayee. Dasgupta was the finance minister of West Bengal at that time and the Vajpayee persuaded Jyoti Basu, then the chief minister of Bengal, to allow Dasgupta to take up the daunting and time-consuming assignment.

He held countless meetings with different stakeholders such as governments, industry bodies, domain experts to understand their requirements and bring them under a unified structure.

“A parallel composition was that of the state finance ministers, an Empowered Committee, and from time to time every government made a tradition that any finance minister of any opposition party should be the president of that Empowered Committee. The first president, Dr. Asim Dasgupta is in our midst. For many years he did a great job of creating consensus. I have expressed my gratitude to him myself that I had received the first education on GST from him, in a meeting,” said Union finance minister Arun Jaitley at the midnight session of the Parliament on July 30, 2017, when GST was rolled out.

Frequent hop

Bengal, a fiscally-troubled state, demanded a lot of Dasgupta’s time and attention and he had to frequently hop between Delhi and Kolkata to hold discussions for the GST assignment.

Dasgupta earned a doctorate in economics from MIT in 1975, five years before he joined the CPI(M). Apart from his erudition, he was also assisted in the challenging job by his long experience in tax administration. Dasgupta was, after all, the finance minister for Bengal for a record span of 25 years, more than anyone else in the country.

Vajpayee to Manmohan

His contribution to the GST committee was also acknowledged by Manmohan Singh, an economist himself, who succeeded Vajpayee in 2004 but continued with Dasgupta as the head of the important reform panel.

He stepped down from the post in 2011 after the ruling Left Front, of which he was the minister, was routed by Trinamool Congress in West Bengal. By that time, 80% of the work on GST was done.

GST bills

After working on the GST model for seven years, Dasgupta was chosen as the head of a committee to structure the GST bills.

He was the finance minister of the state between June 1987 and May 2011.

He wore many hats. From 1999 to 2011, he was also the chairman of the empowered committee formed by the Union government of finance ministers of all state governments for the introduction of Value Added Tax, the precursor of GST.

Tax reformer

Dasgupta was a true-blue reformer. He abolished the much-hated Octroi and highway toll that businessmen had to pay for bringing their goods in the state. Octroi was universally hated by manufacturers and traders since it was a tax collected when the vehicles were entering Kolkata with goods and were made to wait at toll plazas for days for collecting taxes.

Now 75, Dasgupta has retired from active politics. He lives in his Salt Lake residence and keeps up reading and discussing issues of finance with his group of associates and peers and students all over the world.

Teacher

Dasgupta used to teach economics at Calcutta University and he continued to take occasional classes even when he succeeded Ashok Mitra to the chair of finance minister of the state.

A man with a quiet, scholarly approach, Dasgupta used to subjugate his persona before the party’s objectives. Much of his tenure was spent in steering the finances of the state in such as way that attracted investors to Bengal.

Following the economic liberalisation in 1991, the Marxists reluctantly revised their own approach and Basu led the adoption of the new industrial policy in 1994, giving primacy to private capital. Though he himself detested it, Dasgupta had to join the competition among states in what he called the ‘incentive war’ to attract private capital.

Critical

“What we don’t understand is that this race is detrimental to the revenue interest of the states,” he used to say.

In 2003, he overcame a lot of opposition from the trader lobby in the state and enforced the implementation of VAT from the sales tax regime.

Jyoti Basu’s introduction of Dasgupta to the industry circles – “my USA-trained finance minister who would listen to your ideas – became famous among Kolkata’s chambers of commerce following the new economic policy of Bengal in 1994.

Controversial

Dasgupta courted a lot of controversy for presenting zero-deficit budgets. Despite criticism from different quarters, including peers, he continued with it for several years.

His tenure as a finance minister straddled the semi-controlled economy of the eighties to the beginning of the second decade of the 21st century, when the country was benefitting from the tailwinds of a market economy. His detractors accused Dasgupta of not being able to capitalise on the growth possibilities the climate offered and shore up Bengal’s finances.

Though Dasgupta appeared more comfortable in classrooms, seminars, and administrative meetings, he won the Khardah assembly seat in 1987, 1991, 1996, 2001, and 2006, thanks to the mighty election machinery of the Left Front that ruled the state between 1977 and 2011.

Crusader

A party loyalist to the core, Dasgupta had his own battles. Old-timers also recall that in the nineties the finance minister would not hesitate to come down to the streets to help cops manage Kolkata’s unruly traffic better.

Despite Khardah being right in the middle of Bengal’s jute mill belt in North 24 Parganas district, Dasgupta waged a crusade against jute barons evading provident fund defaults and also got some (including non-jute sector businessmen) arrested for non-payment of statutory dues.

He also waged a crusade against ponzi schemes and smashed the network of quite a few. Some also got their passport impounded for a while as Dasgupta used his might to crackdown on the promoters.

In 2013, he cracked down on online lotteries after there were numerous complaints of bottom-of-the-pyramid young men squandering their hard-earned money on these trying their luck to make a quick buck.

In the assembly elections of 2011, Dasgupta was defeated by former FICCI secretary general Amit Mitra, who became the next finance minister of Bengal and continues to hold the post.

Published: May 28, 2021, 12:06 IST
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