A formidable ray of hope that the GST is likely to see the light of the day soon could not have come at a better time for the Prime Minister Narendra Modi-led government. This at a time when the Congress is struggling hard to revive its political significance.
Just a day after BJP's two-day National executive Committee concluded in Allahabad on Monday, where its resolve on GST was informally discussed on the sidelines, finance ministers of all states came together on Tuesday in Kolkata to almost unanimously announce their support for the passage of this single biggest economic reform bill.
The news and timing of the Kolkata resolution was music to the Modi government¹s ears. It tasted particularly sweet to the top leadership for four reasons.
First, it all happened in skillful guidance of Finance Minister Arun Jaitley who has been pursuing for the passage of this constitutional amendment bill for over a year and half;
Second, a Trinamool Congress chief and West Bengal Chief Minister Mamata Banerjee played host to the meet of the finance ministers to resolve contentions of states;
Third, it comes around a time when Modi government is celebrating two years in power and the world is keenly watching the developments on this front, particularly the Prime Minister's ability to fulfill his economic reforms resolve;
Fourth it is an ominous sign to the Congress whose obstructionist attitude has held up the bill in Rajya Sabha for about a year. The meet unanimously rejected one of Congress' key demands that 18 percent cap in GST be inserted in the Constitutional Amendment Bill, as impractical and uncalled for. The Congress would now risk total isolation if it does not come to board and give credence to the voices of its own state governments.
Two days ago Firstpost had reported that the ruling BJP was all set to take on the Congress head on, if it continues to create unreasonable hurdles: "The Congress's bluff has to be called now. Let the Congress have the courage to issue a whip and vote against the bill. If it does so, it will risk international condemnation. The world is waiting for the GST Bill," a senior minister had said.
The way Modi government has proceeded on the matter, waiting patiently to build a consensus, waiting for its turn to see change in political equations in the states and its consequent bearing on national politics, favorable arithmetic in Rajya Sabha is significant. It means that the ruling party strategists have learnt their lessons from the past mistakes it made in aggressively pushing for the land acquisition bill without building favorable public opinion and consensus among the states. In GST, the government is going step by step, prudently using all available institutional tools while trying to garner as much support as it can.
It was also interesting that while finance ministers meet was on in Kolkata where Tamil Nadu expressed some of its reservations as a manufacturing state, Chief Minister J Jayalalithaa was meeting Prime Minister Narendra Modi in Delhi. The meeting was most 'cordial'.
What is to be noted is that Jayalalithaa's reservations about the bill are financial and not political. As a manufacturing state Tamil Nadu will suffer some losses and "loss of fiscal autonomy", under the proposed GST regime. She has presented her charter of demands to the Prime Minister, in which her government position on GST is also articulated. Will Jaylalithaa be fully be on board (AIADMK has 13 MPs in Upper House) to support the bill in "national interest" or stage walkout? Either way that would help government although the BJP strategists are counting on AIADMK's support.
At least three Union ministers including Nitin Gadkari, Ravi Shankar Prasad and Nirmala Sitharaman called on Tamil Nadu chief minister.
Usually it is the chief minister who goes to Central minister's offices but in her case the protocol was just reversed. Foreign secretary has been asked to take up Indian fishermen's issues with Sri Lanka during his visit there and let Jayalalitha know of the outcome. Her other demands would be given due consideration. On her part while she presented a thick list of memorandum of demands she thanked the Modi government for support in several areas. A healthy personal rapport between Modi and Jayalalithaa might reflect on GST.
A process of give and take is likely to follow in due course. What the head of empowered committee of finance ministers, West Bengal Finance Minister Amit Mitra said was noteworthy that they will all meet again in the second week of July for further deliberation. The meet has been timed just ahead of the beginning of Monsoon Session of Parliament, whereby all possible dots could be joined to ensure passage of the bill in Rajya Sabha.
Since the GST is a Constitutional Amendment Bill, the BJP needs two-third of the total members of the Upper House present and voting (163 votes in a full house) and the higher of 50 percent of the Upper House (123 out of 245 votes). The passage of this Bill will have to be followed by a ratification of the Bill by a majority of states. After this, the central GST and the integrated GST legislations will have to be passed by Parliament and state GST laws by states by the end of the year.
However, behind that exultation the party has preferred to maintain caution until the Bill actually clears its parliamentary hurdle. Jaitley maintained that "there is no deadline on GST implementation. But we can say that a broad consensus on its implementation has been achieved and we are moving with positive intent." The government is hoping that if the bill is passed in the upcoming Monsoon Session then it could be implemented from next fiscal.
Jaitley or Modi government's buoyancy perhaps comes from the belief that they might have now effectively checkmated Congress' continuing obstructions.
Another Union minister, who is in thick of government strategy, said, "We have exhausted all avenues available under the Indian parliamentary constitutional system. We have done everything possible we could to convince the Congress to let it pass. It has also gone through many Standing Committees and Select Committees, been debated and discussed inside and outside of Parliament. If the Congress does not support the passage of the GST Bill, it will have only two other options either to issue whip to its members to reject the bill or create ruckus in the house. Either way they will be exposed."
He, however, hopes that better sense will prevail in the Congress party and that it "had taken lessons" from the way people have responded to its obstructionist politics.
What makes ruling BJP leaders happier is that the Left parties are also on board to support the GST. The Left's victory in Kerala could prove good news for Modi government, at least in this limited context.