Modi govt reaches out to Congress, seeks support on GST bill | india-news | Hindustan Times
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Modi govt reaches out to Congress, seeks support on GST bill

The government has reached out to the Congress seeking its support for the passage of the Constitution amendment bill to enable the rollout of the goods and services tax (GST), four days before the monsoon session of Parliament commences.

india Updated: Jul 15, 2016 14:01 IST
Union finance minister Arun Jaitley with Congress leaders Anand Sharma, Ghulam Nabi Azad and Left leader D Raja at the Prime Minister’s office in Delhi.
Union finance minister Arun Jaitley with Congress leaders Anand Sharma, Ghulam Nabi Azad and Left leader D Raja at the Prime Minister’s office in Delhi.(HT File Photo)

The government has reached out to the Congress seeking its support for the passage of the Constitution amendment bill to enable the rollout of the goods and services tax (GST), four days before the monsoon session of Parliament commences.

The GST bill is among the three key bills on economic reforms to have faced prolonged negotiations and delay in their passage in the last five years. The pension fund bill and insurance laws amendment bill are the other two.

The passage of the pension fund bill that introduced 26% foreign direct investment (FDI) in the sector and the insurance bill, which raised FDI to 49% from 26%, became possible only when the Bharatiya Janata Party (BJP) and the Congress agreed to do so.

For the GST bill too, the consent of two biggest parties in Parliament looks essential for its smooth sail.

The proposed legislation seeks to bring a uniform tax structure subsuming a number of imposts and the government claims that it will help add 1% to 2% to the country’s GDP.

Senior minister M Vankaiah Naidu called up leader of opposition in the Rajya Sabha Ghulam Nabi Azad on Thursday and solicited the principal Opposition party’s support for the bill reminding him of that the Congress was its architect.

Sources said Naidu told Azad that regional parties like J Jayalalithaa’s AIADMK, which has been opposed to the bill, and the Trinamool Congress have broadly come on board although they have some concerns.

The government expressed its willingness to address the sticking points in the proposed legislation and come to the negotiating table with an open mind.

The Congress will now hold internal consultations on the issue following which a formal meeting between leaders of the main opposition party and finance minister Arun Jaitley could take place either Friday or Saturday.

The government is likely to consult former finance minister P Chidambaram, who has been entrusted by the party leadership with the task of formulating the Congress’ stand on the GST. Congress has been pressing for a cap of 18% as part of the constitutional amendment bill.

The party, however, has started indicating its flexibility and willingness to talk to the government over its list of three demands including the one on capping the GST rates at 18%, the major hurdle in its passage so far.

Numbers game

So, that brings the BJP again at the negotiating table with the Congress.

“If we can get the Congress on board, it saves us from the trouble of gruelling negotiations with around 10-15 parties to ensure we have numbers at the right time. And it is always better to have the largest party on board because if the Congress decides to stick to its disruptive tactics, the Constitution amendment bill can’t be passed due to the absence of order on the floor of the House,” a senior minister said recently.

The number game in the Rajya Sabha makes it clear that if the Congress and the BJP come together, they alone can pass any bill, even if other parties are not forthcoming.

In case of the GST bill, the BJP has an advantage: almost all regional parties have asked for a speedy implementation of the bill.

The Left parties have their own list of amendments and even the Biju Janata Dal (BJD) wants a few tweaks in the current draft. But the CPI(M) and the BJD have also stated that they don’t want to stand in the way of the GST bill’s passage.

The Congress has so far washed out two sessions in the Rajya Sabha where the GST bill is stuck. In all meetings on House agenda, the party had warned the ruling dispensation not to bulldoze the GST bill until there is a consensus.

And the BJP managers like Naidu, while boasting of enough numbers to pass the bill, have never failed to add: “We want to take the Congress on board.”

As far as the principal opposition party is concerned, the strategy of blocking the Rajya Sabha is losing its firepower. Party managers understand well that too much disruption can also isolate the Congress in the shrinking opposition space.