GST push: Bitten by ‘reform bug’, BJP pins hopes on regional trade off

A reform bug seems to have finally bitten the Bharatiya Janata Party (BJP) leadership at the party’s two-day national executive in Allahabad. The BJP leaders, who returned from Allahabad are overly optimistic about the passage of the crucial GST (goods and services tax) bill shortly.

 GST push: Bitten by ‘reform bug’, BJP pins hopes on regional trade off

Prime Minister Narendra Modi, BJP President Amit Shah, Finance Minister Arun Jaitley and Senior BJP leader LK Advani during the party's national executive meet in Allahabad on Sunday. PTI

Though none of the party’s top leadership is keen to speculate about finite time frame for passage of the bill, they seem to be shedding diffidence of the past and are making commitment for the GST. This attitude emerges in sharp contrast to an ambivalent approach in a section of the party leadership. "We may sail through after a trade off with regional leaders," a senior party leader commented on the situation.

The BJP leadership was initially wary of pushing through with the GST on various counts. The most pertinent among them was the fear of losing small traders who will find it too difficult to manage book-keeping and accounts in smaller districts.

Since traders form a core constituency of the BJP, there was hardly a sense of urgency in the party’s leadership to push through the bill. In fact, the Congress’ obduracy came in handy for the BJP leadership to shift the blame.
However, party sources say that much has changed after Prime Minister Narendra Modi’s recent US visit, where he has assured the international business community of creating a conducive atmosphere for business. The passage of the GST bill will be seen as a first step to reassure the foreign industrialists of Modi’s sincerity and commitment.
What appears to have emboldened the party leadership is self-created situation of “siege” within the Congress after revolt by regional satraps in many places. At the same time, the BJP seems to have regained confidence after its historic victory in Assam. At the Allahabad national executive, the party leadership seems to have perfectly aligned with pro-reform agenda of the government to attain the long-term objectives.

Despite impending state Assembly elections in Uttar Pradesh and Punjab and the possibility of the GST bill being interpreted as anti-small time traders, the party leadership is keen to go ahead with the tide. With the greater determination to push through the bill, what has also emerged is clarity on certain issues. These include not accepting the Congress’ demand of making capping of tax rate inbuilt in the GST act.

The party feels that any constitutional capping of the GST rate is seen as a detrimental to the federal structure and adversely affect the states.

Also, the party doesn’t want to be seen as anti-traders. Sources said that the party is devising a methodology to minimise the GST’s adverse impact on traders at the initial stage. The limit of those having turnover of Rs 10 lakh annually could be revised to keep petty traders out of the requirement of book-keeping and accounting.

GST, the biggest tax reform in India in last one decade, promises a unified tax regime by rolling in several state level levies into one, offering clarity on the tax regime and broadening the tax base in the economy. In the long-run, the roll out of GST is expected to boost the GDP by 1.5 percent to 2 percent.

BJP insiders do not rule out the possibility of the Congress creating ruckus in Parliament’s Monsoon session in order to stall the bill. Given proclivity of motor-mouths of the Sangh Parivar to shoot off controversy, the Congress is expected to find many pretexts to disrupt the proceedings.

But Union Finance Minister Arun Jaitley has been given an unenviable task of using his personal charm on “friends” like Bihar Chief Minister Nitish Kumar and Mamata Bannerjee. Similarly there is a determined attempt take Tamil Nadu Chief Minister J Jayalalithaa on board.

Given her personal friendship with Modi, Jayalailathaa’s initial resistance would not seem insurmountable should the government makes a determined push for the bill. In this context, the BJP leadership appears quite bullish the possibility of having GST bill passed much sooner than later.

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Updated Date: Jun 15, 2016 19:04:11 IST