PANIPAT, India – Tilak Raj Bathla’s tiny weaving factory is one of the few still humming on a once busy road in the northern Indian city of Panipat, known as the country’s “textile city”.
Nearby, more than two dozen other workshops are locked from the outside, while dogs and cows roam through other abandoned factories. Scrap dealers enquire about idle powerlooms.
India launched the Goods and Services Tax (GST) just over a year ago, its biggest ever tax reform, aiming to replace more than a dozen federal and state levies and unify the sprawling economy.
The move improved economic efficiency but critics say the complexities of the new regime have driven many small enterprises out of business and forced hundreds of thousands out of jobs.
For Prime Minister Narendra Modi, the drawbacks of the GST, especially the job losses, could prove costly in major state elections later this year and a general election in mid-2019.