GST rollout: Opposition parties' stand against tax reform act is not just late, but also outlandishly illogical

The opposition parties' decision to boycott the special session of the Parliament on Friday midnight for GST rollout gives a critical clue on India's mindset towards reforms. It tells us why our biggest reform till date — the 1991 economic liberalisation — was more of a political accident and an economic compulsion than a grand strategic move.

From All India Trinamool Congress (TMC), Rashtriya Janata Dal (RJD), Dravida Munnetra Kazhagam (DMK), Congress to the Left, opposition leaders are actively trying to disassociate themselves from the implementation and have put forward some outlandish suggestions to justify their move.

 GST rollout: Opposition parties stand against tax reform act is not just late, but also outlandishly illogical

(From left to right) File image of Mallikarjun Kharge, Ghulam Nabi Azad and Anand Sharma. PTI

Mamata Banerjee now calls it an "epic blunder", perhaps forgetting that West Bengal finance minister Amit Mitra, as the chair of the empowered committee of state finance ministers on GST since February 2016, was one of the chief architects behind the rollout.

The Left has answered her call, ignoring its intrinsic and long connection with India's biggest tax reform. Asim Dasgupta of Communist Party of India (Marxist) as the finance minister of West Bengal in 2000, headed an empowered committee formed by Atal Bihari Vajpayee to look at the modalities, the structural and logistical requirements of GST implementation, and remained its chairperson till 2011.

Only last month, Kerala finance minister TM Thomas Isaac had expressed regret that the GST bill couldn't be passed while the the state Assembly was in session. The state ultimately took the ordinance route. Now, however, CPI's D Raja says Left parties will stay away because the GST will "harshly affect the informal sector".

Congress effortlessly took the cake.

Congress can legitimately claim the credit for being a moving force behind the unitary tax regime, however, it dithered on the decision and ultimately decided to join the TMC and the Left in boycotting the event while dishing out a bizarre set of reasons. The oddity in its position is evident by the way party leaders tried to justify what could be best termd 'a logical impossibility'. Congress claimed the credit for "conceptualising" the bill, quibbled against implementation and tried to tie it to disconnected political and social developments.

In the words of Ghulam Nabi Azad, Leader of Opposition, Rajya Sabha, the boycott is forced by "the distress faced by farmers... their suicides, the merciless attacks and killings of minorities and Dalits in several states... continuing violence against women... government's indifference to the cries of the poor, women, Dalits, minorities... worsening security situation in the country, the situation at the border, (and) the fall in GDP".

Situation at border? Fall in GDP? Seriously?

If this wasn't enough, Congress also objected to the venue, arguing that making Central Hall the venue "insults the memory of India's freedom struggle". Another of its leaders, Anand Sharma, claimed that the "country is ill-prepared for the GST" and that it is not "'one-nation one-tax', neither is it a perfect bill".

A legitimate question arises. If the opposition parties are so against the idea of GST, which in their words is an 'epic blunder', 'blow against informal sector' and 'not a unitary tax', why did they allow the bill to pass? The objections that are being raised at this stage are basic in nature and cannot be fixed with rule-tweaks. Why did the opposition parties wait until the last minute of the rollout to raise these issues instead of blocking the bill at the Rajya Sabha and forcing the government to have another look at it?

Let's recall what Union finance minister Arun Jaitley had said on the floor of the House moments after the GST bill was passed in the Upper House: "I am extremely happy at the fact that when it comes (to the) larger interest of the nation, all political parties have spoken in one voice.... On 17-18 May we will give final approval to rules and rates; looks like it can be implemented from 1 July."

The opposition parties, therefore, cannot say that they were unaware of the date of possible implementation. Their other objection, that the GST is "not perfect", is specious logic. 'Perfect' cannot be the enemy of 'good'.

All the stakeholders, economists and even critics admit that GST is a radical tax reform that will have far-reaching benefits for the economy. To roll out such a reform — that will obviously trigger a period of chaos, disruption and may even see a dip in growth before kicking back into shape — a start must be made somewhere. The teething problems cannot be avoided, it can be best be managed. The government's preparedness will be sorely tested on that count. And we shall never be ready enough for such a sweeping change in a country so vast and disorganised. Therefore, to argue that 'GST should be pushed back till the time is right' is either based on cynicism or escapism. These traits are enemies of reform.

The opposition parties are desperately trying to disassociate from the birth pangs of GST and it is not very difficult to understand why. In fact, it is a politically astute move. The opposition parties are aware that the initial disorder and anarchy may give rise to deep discomfort and anger among the public and it stands to benefit politically from such an eventuality. If the GST rolls off relatively smoothly and without major hitches, it may gravitate round to claime credit for it but if it flounders, GST will serve as a handy tool to beat the Narendra Modi government.

This calculation is at the heart of the opposition parties' sudden reluctance towards GST — a myopic, self-serving, cynical move that thoroughly exposes the bankruptcy of opposition politics.

There is another reason why the Mamata Banerjees and the P Chidambarams are clamouring for the GST date to be pushed back. If GST implementation is delayed, the resultant chaos may stretch towards the 2019 cycle of General Elections to Lok Sabha when Modi must return to seek a mandate. GST could become the opposition parties' brahmastra.

The government is aware of the political calculation and hence deployed two of its senior ministers on Thursday to declare that the opposition parties' cosmetic attempt to distance themselves from GST won't work and it (the act) has many fathers, not one.

Amid this political football, the fate of India's biggest tax reform is up in the air.

Updated Date: Jun 30, 2017 17:45:58 IST