dailyO
Politics

No hope, Modi government is not serious about GST

Advertisement
Nilanjan Mukhopadhyay
Nilanjan MukhopadhyayJul 27, 2016 | 13:20

No hope, Modi government is not serious about GST

Regardless of whether the government is successful in securing the passage of the Goods and Services Tax Bill or not in the ongoing monsoon session of Parliament, it has boxed itself in a corner. In an idiomatic reversal, government is in a "heads I lose, tails you win" situation for two primary reasons.

Firstly, the government has overhyped expectations of people over how the new tax regime will be transformative for their lives.

Advertisement

Secondly, even if the Bill’s passage is secured by obtaining support from non-Congress and non-NDA parties, the government has rebuffed any possible chance that existed for ties between the Treasury Benches and the Congress to get any better.

It must be kept in mind that while rabble-rousers or demagogues within Congress understandably create unnecessary hype, but when the normally reticent Manmohan Singh says that the government has not productively utilised the two years it had at its disposal since May 2014, it is indicative of profound criticism.

In fact, Singh did not stop at that but was forthright in stating that the government’s strategy was flawed because, on the one hand, it has ad nauseam avowed that ensuring a "Congress-mukt Bharat" is its primary objective. But on the other hand, the Treasury Benches claimed that it was keen to seek cooperation of the Congress party.

manmohanbd_072716010052.jpg
Former PM Manmohan Singh said the government has not productively utilised the two years it had at its disposal since May 2014.

"That’s a process which simply requires a different mindset", from the one that Prime Minister Narendra Modi has pursued without a break since the day in 2013 when he formally launched his electoral campaign, said Singh in the same interview.

The fact that the former prime minister put it bluntly that the BJP could not expect support from Congress for GST because it had continued with the venomous assault on the party, indicated that disinformation put out by the ruling party that there were two views within the Congress party – one led by the Gandhi-Nehru family – and another by more "reasonable" elements within the party, had boomeranged on the Centre.

Advertisement

The government has in fact made no progress with securing the support of Congress after Modi’s "chai pe charcha" with Sonia Gandhi and Singh last year.

Witness for instance the bumbling ways of the Centre: On one hand, it claimed before the monsoon session only the Congress was preventing the Bill’s passage. But on the other hand on Tuesday, Arun Jaitley convened a meeting of the empowered committee of state finance ministers to discuss crucial issues on which disagreement persisted.

The panel chairman, Amit Mitra, West Bengal finance minister, disclosed that Jaitley would now "communicate to other parties" seeking a constitutional cap on the tax rate that this provision cannot be included in the GST Bill (or Act after passage) because "no tax rates are provided in the Constitution".

For the layman it means that there is still no agreement on the Bill and the government has been talking of passing it! The Centre, led by the Modi-Jaitley combine, has deliberately obfuscated the fact that the Empowered Committee of finance ministers does not have the power to decide on the issue.

Finance ministers of different states, if they are not from BJP (who are told naturally now given the framework they are not to transgress), have to report the discussions to their party bosses or the necessary committee and only then is the party’s decision taken.

Advertisement

The committee was formed in July 2000 by NDA with select FMs to monitor implementation of uniform sales tax and to oversee phasing out of ST and to switch over to VAT. Later, the UPA in August reconstituted the Empowered Committee of all state FMs as its members.

The objective was to create a forum where major taxation matter could be deliberated sans political din. But it was always a deliberative forum and not a decision-making body.

Peculiarly, the GST Bill was passed by Lok Sabha in May 2015. This establishes that the NDA passed a half-baked legislation only because it had the numerical strength.

When the Congress staged a walkout during the voting on the Bill, the BJP knew that the party would block the Bill in the Upper House. This corroborates that the Centre enacted the law in Lower House only to score brownie points.

The Modi-Jaitley duo erred by presenting the GST Bill as panacea for all problems just as in early 2015, Land Acquisition Bill was showcased as the magic wand, that would usher in the golden era in India. Important however it may be, the GST Bill will not have a dramatically transformative effect on the quality of life of the average Indian, especially the poor who comprise the majority of the citizens.

This brings us to the sneaking suspicion – the government itself is not keen to secure the passage of the Bill but does not wish the onus of its failure to rest on its shoulders. Instead, the BJP wishes to blame the Congress for preventing this legislation that would have enhanced the life of millions of people and argue that the party was anti-poor and anti-development.

The government has not been able to build a reasonable case on this and argues how those who do not have any purchasing power to speak off, will be benefited by a more rational tax system. In any case the steady rise of service tax is of concern to people, including the middle classes who are now beginning to read the fine print in all bills they pay.

If the Bill is passed and people begin asking soon why there is no improvement in their lives despite its passage, government will have no answer.

From the looks of the developments so far, it would be indeed be surprising if the GST Bill is passed in this session.

Last updated: July 28, 2016 | 11:28
IN THIS STORY
Please log in
I agree with DailyO's privacy policy