Veteran BJP leader, LK Advani’s words of despair ‘I feel like resigning’ will resonate well with the what most Indians feel at this moment looking at a completely washed-out Winter Session of Parliament, the main highlight of which was prolonged chaos. This was a session, under normal course, that should have carried the political consensus on to the passage of remaining bills enabling a scheduled rollout of the crucial Goods and Services Tax (GST) reform. This was also a session that should have held a constructive discussion on demonetisation, unarguably the most radical and disruptive reform step ever introduced in India to target black money, fake currency and later packaged as a mode for a big digital push by the Narendra Modi government.
The Winter Session was a clear disappointment on all counts.
Reports suggest that this will be the least productive session since 2010. At this stage, it is doubtful whether the GST will be able to honour the April deadline. The grand indirect tax reform is already delayed by a year since the Modi government took over charge. Originally, this government wanted to introduce GST in April 2016. The continuing delays after announcing a date will not augur well for the investor community, international rating agencies and other economy watchers. What next? A constitutional amendment the government managed last year gives it time till September next year to introduce the new regime. By then, the government will have to regain political consensus and might even need to take another look at the agreed four-slab rate structure. It doesn’t sound like a smooth task in the changed political environment.
What adds to the concerns is that the economic scenario has dramatically changed since Modi's 8 November announcement to nullify 86 percent of Indian currency notes by value.
While the stated gains of the demonetisation exercise are as-yet-unclear, what we know is that a slew of macroeconomic indicators have signaled a sharp drop in economic activity. Incoming data suggests weakness in the services, manufacturing sectors, corporate profitability (as suggested in the big drop in December quarter advance tax payments), consumer demand and hints of massive job losses in the cash-intensive informal sector.
Till October, talk mainly surrounded a 1.5 percent to two percent increase in the GDP on account of GST implementation, now the tale has turned to a similar decline in the GDP on account of the demonetisation-created cash crunch. Everything about demonetisation has occurred outside Parliament, till this day. Nothing on this issue has been discussed in detail and in a productive manner in the House of elected representatives of 125 crore Indians.
With members of both the ruling party and the Opposition shouting down each other every time when they rise to speak on the issue, the public representatives have made a complete mockery of the Parliament and the high values democracy offers to citizens, which gives a sense to the observer that neither side cared about the concerns of the general public who would have looked to the House for clarity on the issue, instead of a meaningless ruckus. There is no better phrase than 'high political drama' to describe both the BJP and Congress accusing each other of not letting them speak on demonetisation. It appears neither side actually wanted a productive discussion on the issue.
Both the ruling party and Opposition are to shame the blame equally for the miserable failure of the Winter Session.
There is no reason why Modi couldn’t have spoken on demonetisation in the House
By any yardstick, this is the boldest, most disruptive reform step India has seen in a longtime. Something that has impacted the lives of every Indian middle-class and poor household — with the possible exception of the super-rich. This is the biggest economic reform introduced with a stated intention to recover black money and destroy fake currency from the system, besides nudging the common man to seek alternative ways other than transacting in hard cash. Given that demonetisation is something personally announced and endorsed by Modi himself and the vast impact it had on common lives, the prime minister can’t deny the moral responsibility to speak about the government action. It is his stubbornness not to speak on the issue that irked the Opposition parties more.
As against this, Opposition parties, led by Congress vice-president Rahul Gandhi too failed miserably to bring the government for a face-to-face discussion exerting the political pressure. Beyond optics and headline making statements, Gandhi, the leader of the largest Opposition party, couldn’t even once engage with the opposition on the demonetisation issue in the House and failed to ask the right questions (read here). The Opposition parties have now been reduced to a group making noises and wasting the precious time of Parliament, instead engaging with the ruling party with constructive criticism and clever political moves. The confusion, cluelessness and lack of homework in the Opposition camp gave a good opportunity to the government and Modi to cry foul of the chaos and not respond to critical questions.
Here is the picture now: At this stage, the post-demonetisation economy is facing yet another wave of slowdown phase, the future path of key-reforms, mainly the GST, remains uncertain. We have a government that is solely focused at this stage on saving its face on the demonetisation gamble, trying out everything from questioning the Reserve Bank of India’s numbers, unleashing the taxmen to distribute gifts through a lucky draw.
Finally, we have a totally clueless Opposition how to go about on the issue
The future is uncertain on when the cash-crunch will get resolved (read here). A washed out winter session is a wasted opportunity and also a big disappointment not just for Advani, but for all of us.
Updated Date: Dec 16, 2016 13:09:24 IST