New Delhi: BJP’s Bihar chief and Lok Sabha MP Sanjay Jaiswal has requested Finance Minister Nirmala Sitharaman to levy a 10 per cent Covid-19 tax on China-made products. He also sought to scrap the proposal to raise taxes in India.
The Indian industry is facing a crisis, and higher taxation is not a solution, Jaiswal wrote in a letter to Sitharaman, adding that a Covid-19 tax on China instead will lower trade deficit and encourage manufacturing in India. Jaiswal confirmed to ThePrint that he wrote to the FM Tuesday.
This is the first time that a BJP MP is proposing to tax China, repeating similar calls from affiliates of the Rashtriya Swayamsevak Sangh, the ideological parent of the ruling party.
Jaiswal also said the idea put forth by some IRS officers to increase the income tax on India’s super rich through a cess is “absurd”. He said the IRS officers are misguiding the Narendra Modi government.
“What IRS bureaucrats are proposing to increase revenue is totally absurd. If you impose Covid cess or tax group with Rs 1 crore income higher, ultimately those who are already suffering from lower economic activities will suffer more,” said the the MP from Paschim Chamaparan.
“Industry activities are minimal, the middle class is in a lockdown. How can these IRS officers and bureaucrats give senseless suggestions to the government to tax more?” Jaiswal asked.
In a policy paper titled Fiscal Option and Response to Covid-19 Epidemic, 50 IRS officers had last week suggested raising income tax rate for those earning over Rs 1 crore a year to 40 per cent, charge a one-time 4 per cent Covid cess on taxable income of over Rs 10 lakh, and a reintroduction of wealth tax. On Monday, three IRS officers were pulled up for making the report public. They were also issued chargesheets and divested of their responsibilities.
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Tax on China
Speaking to ThePrint, the BJP MP said a 10 per cent Covid tax must be levied on China to balance the trade deficit and push the domestic industry.
“What is the point of importing furniture from China? Earlier we were manufacturing API (raw material for drugs) but today 70 per cent of the API industry has been closed. First we import then we make tablets. Why can’t we manufacture API?” Jaiswal, a doctor by profession, asked.
“Our trade deficit was Rs 4,10,000 crore, which is always a business of loss. China uses WTO (World Trade Organisation) provisions to demoralise indian industry,” he said.
The BJP leader added, “Prime Minister Narendra Modi has imposed a tax on import of renewable energy equipment to help the domestic industry. There is a need for a special Covid tax on Chinese products too.”
‘Dependency on China won’t work’
A second BJP MP, who was present during the party’s internal consultations for a post-Covid scenario earlier this month, said the Modi government is aware that “over-dependency on China will not work in long run”.
“When ‘Make in India’ was launched, the idea was to encourage domestic industry but this crisis has shown that dependency on a particular country is not a wise decision. For a few weeks we have struggled for PPE kits due to dependence on China. Ultimately, what we got was faulty (testing) kits,” said the MP, who did not wish to be identified.
He also called for a new manufacturing policy to take note of these concerns.
A commerce ministry official said the government cannot ban products from any country, but more duties might be possible.
“Ban on products is not possible under the free trade agreement. But the government can restrict import and impose more duties to encourage domestic manufacturing,” said the official, who didn’t want to be named.
“The government is working on two fronts. The first is to attract investors who are planning to desert China by providing good incentives. And another one is to promote ‘Make in India’ more aggressively in the policy framework in the coming days,” said the official.
In its February budget, the Modi government had increased import duties — from 25 per cent to 35 per cent on footwear, from 20 to 60 per cent on toys, and from 20 to 25 per cent on furniture goods.
In her budget speech, FM Nirmala Sitharaman had said, “Labour-intensive sectors in MSME are critical for employment generation. Cheap and low quality imports are an impediment to growth.”
The commerce ministry had proposed rationalisation of duty on over 300 items imported from China. Many of them were implemented in Sitharaman’s budget.
Also read: Indians expected to borrow more against gold as Covid financial stress spikes
Push in India against Chinese products
Amid the Covid-19 pandemic and China’s alleged role in spreading it around the world, there is a growing demand in the country to ban Chinese products, or to at least raise import duty on non-essential products.
In a campaign that started Sunday, RSS-affiliate Swadeshi Jagran Manch called for a boycott of Chinese products to encourage the domestic industry.
On the same day, RSS chief Mohan Bhagwat also pushed for an indigenous model of development.
In a video conference Monday, Prime Minister Narendra Modi asked Indian states to attract investment from companies that are looking to move out from China.
Earlier this month, the Modi government also changed its foreign investment to prevent predatory deals from China.
Also read: India should use damaged Brand China, not bash it over Covid like US and Germany
We should thank him for making it evident that the ruling dispensation is but an agency of the super-rich, though mouthing Hindutva slogans and engaging in divisive acts, to corner votes.
Yes, tax him, them but bit not me. Yeah Right.
300% Tax should be imposed on Spurious Chinese Products which don’t last even 1-year , so that Chinese are forced to sell Products with 15 – years Warranty.
What an idiot ! Import tax is payed by Indian Consumers