Congress MP Manickam Tagore on Wednesday moved a motion for adjournment in the Lok Sabha, urging the central government to reconsider the imposition of an 18 per cent GST tax on shop rentals, citing its adverse effects on small businesses and entrepreneurs.
In his notice, Tagore criticized the government’s decision, labeling it a “regressive move” that has significantly raised operational costs for shop owners, indirectly increasing consumer prices and worsening inflation.
Manickam Tagore: “This regressive move will lead to increased costs for shop owners, resulting in higher prices for consumers and exacerbating inflation.”
Key Concerns Raised by Tagore:
- Increased Costs for Shopkeepers:
- Average shop rent in India is ₹25,000 per month, and the 18% GST adds an extra ₹4,500 to the monthly burden.
- This increase translates into higher operational expenses for small businesses, many of whom are already struggling.
- Decline in Sales:
- A survey by the Confederation of All India Traders (CAIT) revealed that 72% of shopkeepers reported a decline in sales attributed to increased costs.
- Impact on Inflation and Small Businesses:
- Higher operational costs are being passed on to consumers, fueling inflation.
- Small businesses, the backbone of the Indian economy, face additional pressure to survive under the mounting financial strain.
Tagore emphasized the importance of supporting small businesses during challenging economic times and urged the government to explore alternative measures to stimulate economic growth without burdening entrepreneurs.
“We urge the Government to reconsider this decision and explore alternative measures to support small businesses and promote economic growth,” he added.
Backdrop of Parliamentary Stalemate:
The motion comes amid disruptions in Parliament during the ongoing Winter Session over issues such as the Adani controversy, violence in Manipur and Sambhal, and other contentious topics. The session began on November 25 and will run until December 20.
Tagore’s motion adds to the mounting demands for the government to address the challenges faced by India’s small business sector, which is crucial for the country’s economic stability and job creation.