BJP continues to oppose VAT, FDI in retail

The Bharatiya Janata Party made it clear here today that there would be no going back on the BJP ruled-states' opposition to the value-added tax (VAT) regime untill Uttar Pradesh and Tamil Nadu had a rethink on the issue.

Speaking on the economic resolution, adopted at the Chennai national executive, party spokesperson VK Malhotra said the BJP favoured uniform implementation of the VAT.

"Few BJP-ruled states share borders with UP, which has no VAT and which can thus give a competitive advantage to traders in that state. Therefore till the Centre persuades these states, we cannot agree to the VAT," he said.

Malhotra admitted that chief ministers of Madhya Pradesh and Gujarat had frequently raised the issue of the desirability of implementing the VAT looking at the unfavourable revenue gap between the VAT and non-VAT states. The BJP had decided to oppose the regime.

"Our governments are in talks with the finance ministry and there has been no change in the BJP stand," he said.

The resolution was mainly aimed at attacking the UPA government's economic policy, which, the BJP said, had made life difficult for the common man. "Look at the petrol prices and the plight of farmers," said Malhotra.

On foreign direct investment in the retail sector, the BJP stuck to its stand that since duties in the country were at competitively low levels and the franchise route already available to foreign brands, FDI in retail would only lead to job loss among small traders and would have not improve trade.

Surprisingly, the stand of the BJP and the CPI(M) on the FDI in retail are identical.

The BJP's inexplicable change of stance on the VAT last year has been laid at the door of the Mulayam Singh Yadav-led UP government's anti-VAT stand. The BJP is afraid that traders, its traditional vote bank, might go over to Yadav due to its stand on the VAT.