The Land Acquisition Bill and the Goods and Services Tax Constitution (Amendment) Bill are likely to be the first casualty of the grand alliance that the Rashtriya Janata Dal of Lalu Prasad Yadav and Janata Dal (United) of Nitish Kumar has reached for the Bihar Assembly elections, at the prodding of the Congress. Nationalist Congress Party of Sharad Pawar and the Communist Party of India are expected to join the alliance to contest the Bihar elections in September-October this year.
The election assumes significance as it would be the first major challenge to the Narendra Modi government in the Hindi heartland since it swept to office last year. A win in Bihar would underline the emergence of Modi as the sole vote catcher for the Bharatiya Janata Party (BJP). A defeat would signal the end of the Modi wave that enabled the BJP to get a majority in the Lok Sabha. Modi groupies as well as critics are waiting with bated breath for the poll results.
The passage of the Land Acquisition Bill – the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, to give it its full name – has become more difficult as Bihar remains an agrarian society and BJP critics would not let an opportunity go to embarrass the government.
The Bill is currently being examined by a 30-member joint committee of Parliament headed by BJP Member of Parliament SS Ahluwalia. The committee is expected to submit its report on the first day of the Monsoon session of Parliament. The BJP had been hopeful of persuading Samajwadi Party leader Mulayam Singh Yadav to support the Bill. However, with the Samajwadi Party chief playing a major role in bringing the Bihar duo together and working on the merger of Janata Dal offshoots post-elections in Bihar, the chances of him bailing out the Modi government have receded.
Adding to the woes of the Modi government is the criticism it faces from its own allies. The Akali Dal and Shiv Sena, allies of the BJP, have also expressed reservations on the on the land acquisition issue though much of it could be bargaining for more berths in the Cabinet.
Though the government has the option of calling a joint sitting of Parliament if the Land Acquisition Bill is defeated in the Rajya Sabha, it is aware that it cannot risk such an exercise close to crucial Assembly elections. A retreat over the Bill would be damaging to the government’s image as it would be seen as backtracking on its reforms initiatives.
Far trickier is the issue of the 122nd Constitution Amendment Bill giving statutory cover to introduction of GST. Though the government was able to get the requisite two-thirds majority in the Lok Sabha, it accepted opposition demand for referring the Bill to a select committee for a detailed examination of the proposals.
While all parties agree on the need to streamline indirect tax collection and introduction of GST, the devil lies in the fine print. After agreeing on the GST, the state chief ministers have raised fresh demands, including right to tax tobacco and full compensation for five years from the Centre for any revenue loss to States. Initially, the state governments wanted alcohol and petroleum products outside GST as the two were major revenue generators for the States. The Centre had agreed to compensate states fully in the first three years and in a graded manner for two subsequent years. Moreover, the States want to retain the right to impose entry and purchase taxes, thereby upsetting the government’s plan to have seamless common market.
The states have a major role in passage of the GST Constitution Amendment Bill as it has to be ratified by at least 15 States after both Houses of Parliament pass it with two-thirds majority of those present and voting.
With so many twists and turns, chances of introduction of GST from April 2016 seem bleak.