GST passage is triumph of cooperative federalism

GST passage is triumph of cooperative federalism

By Virendra Kapoor | 6 August, 2016
Politicians are not devoid of good sense, after all.


It was the finest hour for celebrating cooperative federalism. The national polity coming together to pass the GST Constitutional Amendment Bill on Wednesday was a testimony to the inherent decency of the political class. Setting aside corrosive partisanship, a vital ingredient of competitive politics everywhere, they all rose as one to push through a long-delayed reform, which promises to transform the entire economic system. Three cheers to politicians. On this occasion, instead of abuse they deserve praise for doing the right thing by the country.

It was heartening to see Finance Minister Arun Jaitley and his immediate predecessor P. Chidambaram finding themselves on the same page regarding the broad contours of the Bill. Even when they disagreed, as on the question of the proposed GST Bills being money or financial Bills, it was without the usual rancour and confrontation, which had defined the relationship between the ruling party and the Opposition Congress hitherto. It was as if overnight they had discovered some hidden goodness in GST over which they had bickered bitterly for over two years.

How was this made possible? The obvious reason is that both the ruling party and the Opposition Congress became wiser with the passage of time. They relented from their earlier irreconcilable positions, meeting each other in a spirit of accommodation, thus paving the way for common ground to be discovered on the more sticky points. Frankly, after two years in power, the BJP was no longer as arrogant as it was in the first flush of a huge victory. It needed to push ahead with the vital reform for its own sake as much for the sake of the economy.

Scoring big on GST is bound to embellish its record in office. And if all goes well at the implementation stage, and we see no reason why it shouldn’t, economic gains can well translate into electoral gains for the ruling party in the months and years ahead. Admittedly, there is no comparison in the content and purpose of the two momentous moments in the life of the UPA and the NDA, but the win in Parliament on the nuclear deal had sent the Congress’ stock soaring. That nothing tangible had flowed from that deal was another matter. Likewise, the Narendra Modi government has gained in public esteem following Wednesday’s grand feat in Parliament. And unlike the nuclear deal, gains from it are set to be felt at all levels very soon. An estimated 1.5 to two-point boost in GDP is bound to prove revolutionary.

Indeed, the ruling party should try and build on the positive atmosphere generated by the passage of GST Bill to try and narrow differences on no less insignificant reforms concerning labour, land and public sector. Rejection and rebuff on GST, the BJP should not forget, eventually led the Congress to come round. So, it should not dismiss the idea of further consensus out of hand.

As for the Congress, more than two years after its pulverising defeat, the party seems to have finally realised that confrontation and non-cooperation with the government could result in further erosion of its appeal. Corporates and public opinion disapproved its dog-in-the-manger approach. Besides, the states, including non-NDA states, were rooting for GST. The Congress could not have continued playing spoilsport without risking isolation in and outside Parliament.

Maybe the little uptick in its fortunes, which it espies at the ground level, had given the Gandhis confidence to play a constructive role on a reform in which it too had invested a lot while in power for a decade. Besides, it could no longer ignore that GST was unanimously backed by economic pundits and various business and industrial bodies.

Once the Congress was on board, the GST was as good as through. Even the Communists felt obliged to lend support, given that much to their consternation the Kerala Finance Minister, Thomas Isaac, a senior Marxist, had emerged as an enthusiastic votary. Indeed, Jayalalaithaa’s foot soldiers were careful not to carry the opposition beyond a point, preferring to walk out rather than vote against to register protest about a producing state like Tamil Nadu standing to lose, at least in the initial years, from the implementation of GST. Everyone was keen not to be seen to be on the wrong side of history when Parliament made it that late hour on Wednesday.

As for cooperative federalism, what better way to describe it than to use Jaitley’s evocative phrase “a pool of sovereignty” in which both the states and the Centre agreed to swim together for the larger good of the people. The Centre and the states had surrendered exclusive rights to tax so that together they could establish one big, integrated common market for all of India.

Already, those in the business of hauling goods and human cargo across the states cannot stop jumping with joy at the thought of the expected demolition of border barriers. Myriad gains are in the offing if GST is implemented, though we wish they had included petroleum products in its ambit—even if the states wanted to keep alcohol exclusively for themselves in order for them to oil their electoral machines and private coffers.


The body blow to the self-appointed super kings of Delhi through a correct and proper reading of the Constitution by the Delhi High Court seems to have deflated the AAP balloon. With Boss Arvind Kejriwal in silent mode for a week—quite a record for someone who invents ever new ways to abuse Modi almost daily—his minions are reduced to suggesting that even the high judicial authorities could not have got it right.

Admittedly, we have to be grateful to these charlatans for not imputing motives or holding Modi responsible for the clarificatory order setting out the correct constitutional position of Delhi as a Union Territory, albeit with an elected legislature. But you never can trust them because some underlings have been heard muttering profanities, something that comes naturally to them, under the breath.

However, how nincompoopish can the AAP crowd be is easily gauged from the comments of Manish Sisodia, Kejriwal’s deputy from the time they started their lucrative NGO career fuelled by the Ford Foundation dollars. He feigned great shock that a party which had 67 out of 70 seats in the Assembly was being denied absolute power. Sisodia was aghast that the court should have drawn constitutional red lines and no-go areas for it to enter and mess around. Little does this solitary confidant of the AAP Boss know that the role, functions and powers of a government are not determined by its numbers in the legislature. A government with a majority of one has the same powers as the one with a four-fifths support behind it.

While still on AAP, one wonders how many times, if at all, did Kejriwal go for self-healing sessions to an expensive nature farm in Bengaluru or for Vipasana in Dharamshala before he ceased to be an aam aadmi. Clearly, the tangible and intangible gains of being a politician have already made a VVIP out of the self-appointed guardian of the common weal.


Politicians like everyone else enjoy a good joke. Like this one heard in the Central Hall a day after the BJP-Congress détente on GST. Apparently, Modi while thanking Rahul Gandhi for the Congress support invited him to see a movie. Gandhi agreed. Watching the movie together, Modi and Gandhi wagered a Rs 1,000 bet on whether or not the hero would jump off the bridge since he was so depressed that he wanted to end his life. Modi said he would, Gandhi said no, he wouldn’t. Soon the hero jumped and died. Promptly, Gandhi took out Rs 1,000 from his pocket and gave it to Modi. However a few moments later, Modi returned the money, saying actually he had seen the movie earlier. It was now Gandhi’s turn to respond, “To tell you the truth, I too had seen it but thought this time he would change his mind.”


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