Imagine a nail-biting cricket match. The two Indian batsmen on the crease have to score a few runs to ensure victory. Only a few balls remain. However, the two batsmen are competitive and don’t like each other much. They don’t want the other player to get the winning shot. As a result, whenever either batsman at the striker’s end wants to run between the wickets, his runner doesn’t co-operate and stays put. Soon, the balls run out. Guess what happens? Yes, India loses.
The above example tells you what is happening with the GST (Goods and Services Tax) bill. The two batsmen are the BJP and the Congress. At present, the BJP is in power, and the Congress is doing its best to prevent the GST Bill from being passed in the Rajya Sabha. However, when the Congress was in power, the BJP stalled Parliament. In fact, GST introduction was mooted in Parliament in 2007. Another version of the GST bill was circulated in 2011. It didn’t pass, and ultimately lapsed as the Congress-led government dissolved. Now, it’s the BJP’s turn in power, and they have their own version of the bill. Congress and its supporters thus feel that stalling it isn’t ethically wrong, it is just quid pro quo. In this internal war of the two batsmen, India is going to lose.
The GST bill is the single most important internal reforms idea on the table at the moment. It can have a huge effect on all Indians, and particularly job creation for the young generation. The sad part is this: GST as an issue is boring as hell. Hence, it gets tough to get people involved. But if people don’t care, the two batsmen are going to keep fighting with each other and not let the bill pass. Hence, it is time all of us paid attention. Sometimes, what is boring is the most important.
So why is GST such a big deal? Three Indian internal policy reforms could significantly accelerate economic growth (and jobs). These are the land, labor reforms and GST Bills. India faltered on the first two, as the bills were seen as politically sensitive. Somehow we convinced ourselves that the Land Bill was anti-farmer (it wasn’t; in fact, it encouraged companies to set up plants in the hinterland, the only way farmers’ kids will get jobs). Ditto for labor reforms, which eventually increase jobs but our free market paranoia and socialist psyche stalled it as well. Sadly, farmers themselves will suffer because of this, and those in the labor market will have fewer jobs due to fewer investments.
Fortunately, the GST is not as politically sensitive. However, if we don’t pass the GST, we are heading the same way. We are not solving a fixable problem, which is a complicated indirect tax structure that makes India uncompetitive compared to China or other Asian markets. Make in India, which we all want, is currently unviable for the ‘makers’, both Indian and foreign, who frankly can and would rather make in other markets, or import goods.
The GST Bill replaces several taxes with one and reconfigures the taxation for the centre and the state. It brings Indian taxation in line with what is practiced in 130 countries across the world. Passing it is a monumental task. The bill requires Constitutional amendments, in over ten sections. Hence, both the Lok Sabha (where it passed) and Rajya Sabha (where it is currently stuck) have to pass it with two-thirds majority. After that, half the states have to pass it in their legislatures. It is a phenomenal exercise that requires almost all Indian state and central government entities to act as one. It isn’t a BJP or Congress bill. It is our bill. Despite the past, Congress needs to stop stalling it. The BJP needs to forego some credit and share it with the Congress. We, the citizens, need to back it and put pressure on our lawmakers to pass it.
We risk losing jobs for an entire generation if we don’t pass the GST bill soon. We have a majority government and this is as good a chance as we will ever get for this reform. It is time the two batsmen get together on the field and score the runs. It doesn’t matter who hits the winning shot, let’s just make sure India wins!