The fate of the GST bill still lies in limbo; the BJP-led NDA does not have the numbers in Parliament. Congress for all its reform talk has been adamant in not supporting the passage of the bill. Unfortunately having a majority in the Lok Sabha is not good enough for the BJP should also get consent from the Rajya Sabha.
Corporate India, small and medium enterprises and the financial markets, are all awaiting the passage of the GST Bill as they believe it will help create a common market to trade goods and services within India. Tariffs, surcharges and different taxes across borders act as artificial barriers that limit and inconvenience businesses.
It is extraordinary that even though India has been a strong political union for about seven decades, political parties have failed to create a common market. The Rajya Sabha has 245 members, and for the bill to be passed, the NDA must procure half the votes; thus 123 members should vote for the bill. Congress’ 67 Rajya Sabha MPs are opposed to the bill, but between March and July 75 members are expected to retire.
BJP and its allies have 60 seats, and going by Morgan Stanley’s new analysis it has the opportunity to increase its strength from 97, which includes the parties that support the GST, to 110. This will bring it closer to the magic figure.
If the GST bill is passed in Parliament, getting it ratified by the states will be the next step. With the BJP and its allies in power in 12 of 29 states, and readiness and support from some non-BJP ruled states, there is a lot for the NDA to be sanguine about. The best case scenario would be for both the NDA and the Congress to support the bill in the Rajya Sabha; not only will it exemplify bipartisanship for a national economic cause, but will also set precedence for the future.
Political differences are an integral part of a liberal democracy. There ought to be differences, but political opportunism should not turn into political obstruction. The Congress-led UPA while in government was in favour of GST. With an economic reformist like former Prime Minister Manmohan Singh in their camp, the Congress should be behaving differently. There are few who understand the importance of a rational tax system as well as Mr. Singh does, and GST is the best bet at rationalizing the tax regime.
Read more at http://www.thestatesman.com/news/opinion/gst-in-limbo/128626.html#zr0rFRXKZpyZHAFs.99