Morning after GST, what BJP must worry about
Pending for more than a decade, the Goods and Services Tax (GST) Bill was passed on Wednesday (August 3) after considerable uncertainty.
Questions can be put to both the government and Opposition. If the Bill had to cross the hurdle of the Upper House under near unanimity, could this not have been achieved earlier?
The government could surely have adopted a conciliatory stance. Similarly, the Congress could have kept aside its strategy of opposition for opposition's sake.
The Congress will argue that the reasonableness expected from it since 2014 could have been displayed by the BJP when it was in Opposition and when the UPA was in power to ensure that the Bill was enacted during its tenure.
It can even argue what Manmohan Singh did in a recent interview: does a party which ad nauseam states that it will usher in a Congress-mukt Bharat, actually expect cooperation from it?
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| The Modi sarkar had gambled by investing hugely in the GST and its passage. |
The BJP too can hit back by arguing that if the UPA had displayed the compromise finally displayed by the Modi sarkar, the GST Bill would have been passed several years earlier.
Shortly after the Rajya Sabha passed the Bill, there were celebrations in the treasury benches.
No one can probably begrudge Union finance minister Arun Jaitley a small bite of cake or mithai along with his colleagues in government.
But this must not be overdone and any attempt to steal the credit completely and stay in jubilatory mode for weeks would only backfire.
Forget that exaggerating the achievement will rile the Congress; it in any case will be lukewarm in its enthusiasm. But more importantly, tom-tomming its "achievement" on the passing of the GST Bill, the Modi government will fritter away the strategic support of smaller non-NDA parties, which will again be alienated from the government.
The government must remember that this was not the last time that it would require support of the combined strength of the Rajya Sabha. And the BJP, along with its allies, is not going to get the numbers on its side in the House for quite some time to come.
The actual rollout of the GST is still a long way away and it will be a race against time for the uniform tax measure to come into force from next financial year.
It will be several months after the new tax regime comes into place that people may actually reap the benefits.
I have long argued that the GST, for the past decade and more, was never a people's issue, but was the preoccupation of headline writers, politicians, business people and the intelligentsia.
People will be happy only if they think it has benefited them. This will be calculated by them through the prism of change in their monthly spending.
It is up to them to conclude whether the likely increase in taxes for services will be offset by a reduction of cost of other products. No amount of cajoling can make people believe that they have been benefited when they assess that they actually have not.
The Modi sarkar had gambled by investing hugely in the GST and its passage. At one point, like it did in the case of the Land Acquisition Bill, the government presented the tax legislation as a magic wand that would extricate people from poverty and being about revolutionary changes in their lives.
In a country where the majority do not understand the difference between direct and indirect taxes and where people do not read the fine print of their monthly bills and instead zero in on the grand total, the rise in their most common expenses will have to be countered by the BJP.
With the use of mobiles increasing with every passing minute, increase in its cost, for whatever reason, will not particularly please people. The rising cost of telephony may well become the new element in the "mehangai kamar tod gai" narrative.
Players in the markets also will be disappointed because they have been expecting the passage of the GST to herald the return of the pro-reforms Modi.
But while GST was politically non-contentious within the Sangh Parivar, the other reforms that are on Modi's wish list, including labour reforms will not be very easy for the government to introduce. Already, the government is facing opposition from economic nationalists in the Sangh and it is being forced to be cautious with pursuing the prime minister's reforms agenda.
The government will have to address another issue and an indication of this was provided by the walkout of the AIADMK members as the GST Bill was being discussed in the Rajya Sabha.
There are fears that rich states will lose out to the poorer ones and that is when the finance minister's adroitness will be essentially tested because he will not be able to blame political adversaries for triggering protests. The situation will get murkier on the issue of lesser share of the states than their present revenue earnings.
But the biggest worry for the BJP is the erosion of political support in large parts of India.
Barring Madhya Pradesh, there is no state where elections are due over the next two years that the BJP does not face a problem.
While the setback to its poll preparation in Uttar Pradesh has been discussed at length, the party has major issues to worry about in Punjab, Uttarakhand and Manipur, where at one point it was considering toppling the Congress government. Its urban base in Punjab is no longer a certainty.
The losses suffered in Gujarat are also known and it will take a huge effort for the party to regain its pre-eminent position in the prime minister's home state. Similarly, the graph of the party is on the decline in Rajasthan and even Goa, which though a small state, has immense symbolic value.
BJP leaders, in government as well as in the organisation, have their plates full.
Instead of gloating over the passing of the GST (which is not insignificant in any way), the BJP has to focus on issues that will enable it to prepare for the 2019 Lok Sabha elections with confidence. The sooner the BJP strategists return to their drawing board, if they have not done so already, the better.