Rahul must help pass GST

Rahul must help pass GST

By M.D. Nalapat | 1 August, 2015

While he has since 1995 been less than effusive about Congress president Sonia Gandhi, this columnist has refused to include Rahul Gandhi and Priyanka Vadra in such acerbity. It would be unfair to pass a verdict on Rahul and Priyanka until they each have had the opportunity to prove themselves. While there has been much negative comment about Rahul Gandhi's role in the misfortunes of the Congress, the reality is that till very recently, this was marginal. Control was firmly in the hands of his mother and her confidants. However, now that the baton appears to have been passed on from mother to son, there is no doubting the fact that Rahul and his hyper-aggressive stance on the BJP has revived the confidence in itself of the Congress, helped of course by the BJP's less than perfect performance in the economic field. Jobs are still scarce and confidence low, despite windfalls such as a crash in global commodity prices and increasing tensions between the Atlantic allies and Japan on one side and China on the other, thereby opening the door for more "Make in India" investments, of course once a suitable policy and performance matrix gets implemented.

As for Priyanka, whether in the 2017 UP polls or later in 2019, she has charisma enough to move the voter, quite apart from her outgoing nature and its invigorating effect on the party cadre. Overall, the fact that after years of corruption charges thrown in their direction by key BJP leaders, the fact that in its 15th month the Modi government has not even filed an FIR against either the Congress' ruling family or its key retainers, has given ammunition for the claim that such accusations were a canard, or else would not the BJP government have acted against them during the past year? Such inaction on the part of the BJP government against the top guns in the UPA (in contrast to recent moves by the investigative agencies against smaller fry, coincidentally those involved in feuds against regional BJP leaders) has given an opening for Rahul to launch an assault against the BJP that has given his party a punch way above its puny weight in the Lok Sabha. A much bigger BJP seems often on the defensive and losing public esteem, despite being led by the still-formidable Narendra Damodardas Modi. However, such aggression needs to cease at the waterline of vital national interests, including terrorism, external threats and the economic policies essential to finally ensuring that India reach the 15% annual growth trajectory the country needs to abolish extreme poverty within a generation.

In the roster of such measures, none is more important than the Goods and Services Tax (GST) Constitution Amendment Bill awaiting passage by two-third of Parliament and two-third of the state Assemblies. It must be said that the parliamentary management of the post-2014 government is thus far even worse than the low standards set by its predecessor. Both the GST as well as the Land Bill ought to have been passed at least two sessions ago, had an effective strategy been worked out by BJP parliamentary managers. During the previous session, the Congress had asked for the GST Bill to get referred to a Standing Committee, which has come up with a change that could easily have been effected without resorting to such a time-consuming procedure. It further promised that the GST Bill — which, incidentally, was a Congress-backed measure despite the legislation having been introduced in 2000 by Atal Behari Vajpayee — would get passed with Congress support during the current (monsoon) session of Parliament, an assurance that the national interest mandates be kept.

As Rahul Gandhi would know, India after 68 years of freedom still has less of a unified market than the multi-country European Union, with our states each erecting barriers to inter-state commerce, thereby reducing overall growth by an estimated 2% each year. Getting the GST passed (of course with the Congress-suggested amendment) during this session of Parliament is crucial to ensuring that it comes into force during the next financial year. This is because it will take about six months from passage in both Houses of Parliament for the state Assemblies to enact supporting legislation. After that, for the measure to get fully operational would require a transition period of about 90 days. Should the GST Bill get delayed till the winter session, it will not be possible to get ratification by the states done as well as ensure the operational transition to the new system before 1 April 2016. This would mean that the measure would get delayed a year, during which five states go to the polls that may throw up governments that reject the present painfully-arrived at Centre-State consensus on the Bill. 2017 would be still more problematic, as the UP Assembly polls would take place that year together with the elections in Punjab. It is therefore essential that the GST Bill get passed during the next nine days (or if needed, more) that the current session of Parliament has.

Rahul Gandhi need not worry that the GST-resulting uptick in the economy will boost the fortunes of the BJP sufficiently to gift Prime Minister Modi a second term in 2019. The BJP has already lost the chance for that by its inability to get the Bill passed thus far. For even after it does become law, it will take around three years for the impact of GST to get felt in the economy sufficiently to affect poll prospects. As in the case of the Vajpayee government, whose measures gave a growth cushion to the incoming UPA so as to camouflage for a while the damage that Manmohan Singh wreaked on the economy subsequently, passage of the GST would not help Modi before the 2019 Lok Sabha polls, but it would over the next several years significantly buoy up the Congress-supported coalition that Rahul's strategists are aiming at to replace the BJP in the next general elections. In the UK, during 1939, Conservative MP Leopold Amery exhorted the Labour Party's Arthur Greenwood to "Speak for England", rather than just for his party during the House of Commons debate on the war with Germany. Hopefully, Rahul Gandhi will in the coming weeks "speak for India" and thereby ensure the passage this Parliament session itself of a measure that can unify India as effectively as pilgrimage sites and the English language presently do

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