Hibi Eden Raises Concerns Over North-South Divide in GST on Food Taxation

During a Lok Sabha debate on the Finance Bill, 2025, Ernakulam MP Hibi Eden raised concerns about regional disparities in GST rates on food items. He highlighted that Kerala's banana fritters and dal vada are taxed at 18%, whereas north Indian sweets like jalebi and barfi attract only 5% GST. Eden accused the Centre of fostering a north-south divide through these tax policies.

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Eden argued that the current GST framework unfairly burdens small businesses in Kerala. Traditional snacks, which are essential to daily life in the state, face high taxes. Meanwhile, popular north Indian sweets enjoy a much lower tax rate. This discrepancy, he claimed, exemplifies regional discrimination in tax policies.

Economic Indicators and Regional Disparities

The Congress MP also pointed out a decline in key economic indicators. He noted that transport growth fell from 6.4% to 5.8%, while bank credit growth decreased significantly from Rs 21 lakh crore to Rs 11.5 lakh crore. Cement production, vital for infrastructure development, dropped from 10.3% to 3.1%.

Eden criticised the government's claims of strong economic growth, stating that GDP increases do not necessarily lead to higher employment or wages. He emphasised that corporate profits continue to rise at the expense of workers' real incomes, highlighting the disconnect between economic growth and individual prosperity.

Call for Equitable Tax Policies

The Congress leader urged the government to adopt a fairer approach to taxation. He stressed the need for policies that do not disproportionately affect certain regions or industries. Eden's remarks underscored his belief that equitable tax policies are crucial for balanced economic development across India.

"We have seen the government divide the country on the basis of religion, food and even the clothes we wear. But this is the first time we are witnessing a north-south divide even in the GST framework," Eden said.

In his speech, Eden highlighted how these tax differences contribute to financial strain on small businesses in Kerala. He argued that while Kerala's staple foods bear a heavy tax burden, widely-consumed north Indian sweets benefit from a lower rate.

The discussion brought attention to perceived regional biases within India's tax system. By spotlighting these issues, Eden aimed to prompt a re-evaluation of current policies to ensure fairness and equity for all states.