BJP can reach out only if Cong interested in GST
Though finance minister Arun Jaitley has said he is willing to talk to anyone in the Congress party, including vice-president Rahul Gandhi, to get the GST Bill passed, there doesn’t seem to be any visible sign of a thaw in relations. If anything, after Subramanian Swamy’s expose of Gandhi’s alleged British citizenship, the equation between the parties seems to have got worse; add to that the post-Bihar cheer in the Opposition camp, and it looks as if the next session of Parliament, beginning Thursday, could also be a washout unless the NDA does some serious damage control in the meantime and really reaches out to the Congress party and others in the Opposition.
In the case of GST, certainly the BJP can try and accommodate some of the Congress party’s demands, but many of them are impossible to meet—indeed, it would appear they have been made to ensure the GST Bill is never passed. Certainly, now that the government has agreed to full compensation to states for the first five years, the 1% levy the Congress is objecting to can be dropped. The Congress demand for an 18% revenue-neutral rate (RNR) or less, as our top editorial argues, is a bogey since the rate depends upon how many sectors are left outside the purview of the GST—in any case, no Constitutional amendment Bill can ever prescribe a floor or a ceiling for a tax; this is something that has to be done administratively each year as the Congress knows well. In an ideal situation, tobacco and alcohol should be included in the GST, but with most states adamant that they should not, insisting on including them in the Constitutional Amendment Bill is the surest way of ensuring it does not get passed. Similarly, lowering the Centre’s voting share to 25% is to ensure the states alone control the future of GST—wanting to concentrate powers in the hands of the states is in any case odd, since it is they that are standing in the way of including alcohol etc that the Congress wants in the GST; more than anything else, this exposes the Congress party’s double standards on GST.
Though the Congress is acting the spoiler, the BJP has no option but to keep reaching out to it, and this will probably include some big gestures from Prime Minister Narendra Modi. While it is true Modi is trying to push through some reforms that do not require parliamentary approval—this includes fungibility between FDI and FPI and getting BJP states to pass land and labour-reform laws—there are too many big Bills stuck in Parliament. Apart from GST, there is the real estate Bill as well as the railway regulator—while neither is that critical, the Bankruptcy Code is critical if banks are to be able to start resolving their NPA mess. That’s something the Prime Minister is aware of.