By Shruti Appalla
90 lakh truckers have joined a two-day strike against the governments policies related to GST, starting 9 October. Reports indicate that in states like Tamil Nadu, Karnataka and Himachal Pradesh, more than 9 lakh trucks have either gone off-road or are at a standstill on state borders refusing to move goods and essential commodities.
The call for the strike
The strike was called in at the last minute as negotiations broke down between the apex trucking body of the country, All India Motor Transport Congress (AIMTC) and the government. Additional Vice President of AIMTC, Harish Sabharwal, who is also a member of the Road Safety Council of the Ministry of Shipping, Road Transport and Highways was quoted saying, We are going on a nationwide Chakka Jam today and tomorrow. Negotiations with the government did not yield any results as they did not agree to our demands. The truckers will suffer a loss of Rs 2,000 crore. We are compelled to suffer this loss.
AIMTC claims that despite the personal loss to the industry, especially small-time drivers, porters and support staff, the move was necessary to force the government to recognise the urgency of their demands. The protest is a move to pressurise the government into changing its policies on GST taxes levied against the industry, daily diesel prices and Regional Transport Offices (RTOs).
Grim situation of truckers
The AIMTC claims that under the GST, the industry has to pay taxes under three different tax slabs. Confusion in the government itself over the tax slabs has induced the truckers to face severe losses. Dealers across the country have claimed that they are forced to do coercive registration and unnecessary compliance due to GST in areas where they were earlier exempted.
Furthermore, the corporation wants the government to bring diesel in the new indirect tax’s ambit. The recent policy of having daily diesel prices has affected the ability of the industry to cope with the daily-changing prices. The policy has also reduced the capacity of the industry to hold the government accountable for fluctuating fuel prices. Diesel accounts for 70% of the operational cost for a trucker and hence the move of bringing it under the GST would bring in the much-needed uniformity in pricing.
Another associated policy battle between the corporation and the government involves RTO. The AIMTC claims that there is rampant corruption at these offices that goes unchecked. Truckers have lost over 80,000 crores as bribes to RTO officials. The AIMTC has demanded that “challans must be prohibited” if there is no electronically verifiable proof of the official having a connection to the RTO. The government had earlier promised that RTO barriers would be removed between states as part of the new GST regime to ostensibly symbolise the one nation, one tax ideal. Yet, only four of the 22 states have removed the barriers while others continue to draw taxes.
AIMTC General Secretary Naveen Kumar Gupta said that among other problems, daily payment at toll gates within and across the states had turned into a nightmare due to long queues, wastage of fuel and traffic pile-ups at their entry and exit points.
Consequences of the strike
It is hard to predict whether the government shall give in to the demands of the AIMTC or hold a fresh round of negotiations but what can be certainly predicted is the inevitable price rise of commodities. Especially before Diwali, when households across India would be aiming to purchase essential commodities and luxury items. A rise in prices is going to restrict spending, thereby affecting the economy. Reports of factory shutdowns have also come in due to the stoppage in the flow of raw materials across the state borders. For example, an official of Ambuja Cement said that the strike has affected normal production at the two units. Likewise, the production of Jaypee Himachal Cement, a subsidiary of diversified group Jaiprakash Associates, located in Solan district, was also hit.
Reviewing the loss that both the government and the industry would suffer from the two-day strike, it is imperative that the difference is resolved as soon as possible.
Photo credit: bryangeek via VisualHunt / CC BY-SA