Being an ex-Finance Minister is a luxury, quipped Finance Minister Arun Jaitley while replying to the nearly seven-hour debate on the Constitutional Amendment Bill for the roll-out of the Goods & Services Tax (GST) on Wednesday, as his predecessor, P. Chidambaram, cast a spell on the House as a key speaker.
In his debut performance in the Rajya Sabha, Mr. Chidambaram managed to unite political parties on the key issue of the GST rate: “I want an assurance from the Finance Minister that when the GST Bill is brought, it will be brought as a financial Bill and not as a money Bill … This is [a] far too transformational and important legislation that one House of Parliament should just speak on it and the other will vote… Both Houses should debate and vote on it.”
Mr. Chidambaram said the government was initially “rather stubborn”, but he, on behalf of his party, “loudly and clearly” wanted that the tax should be not more than 18 per cent.
Mr. Jaitley, who could not give an assurance for legislation that had not even reached the draft stage, successfully pushed the Bill through by assuring the House at the time of concluding the debate that the rate would be moderate. He did not allow Mr. Chidambaram’s demand to disturb the consensus he had skilfully built in the run-up to the vote in the Upper House — he met and sought to address issues raised by leaders across the political spectrum, from the Left and the Samajwadi Party to the Trinamool Congress and the Rashtriya Janata Dal and worked towards what he called the best possible outcome.
If Mr. Jaitley succeeded in ensuring the passage of the Bill, while his predecessors didn’t, it is because of this approach of not letting the best be the enemy of what is doable. He acknowledged that legislation of such a kind was bound to improve with each passing day.
“A legislation of this kind cannot be made on the basis of a partisan approach ... It impacts the Centre and States and we have systematically worked towards a political consensus ...There is as far a consensus as possible if not unanimity as far as language and contents of the Bill are concerned,” Mr. Jaitley said, initiating the debate.
Winning over States
In his efforts to ensure the passage of the Bill in the Rajya Sabha, where the ruling party does not have a majority, Mr. Jaitley worked to gain the confidence of State Finance Ministers, who, he said, had lost the trust of the Centre following delays in payments of compensation for losses on account of previous taxation changes introduced by the Centre in consultation with the States.
Mr. Chidambaram welcomed the “conciliatory and friendly” tone of the Finance Minister. “The approach and tone in the last 3-4 weeks augurs well,” he said, recalling how his own efforts in 2011 and 2014 in trying to build the consensus were akin to the “chaar dhaam yatra” wherein despite “travelling between his Prime Minister, the Leader of Opposition in the Lok Sabha, and the Leader of Opposition in the Rajya Sabha and the Empowered Committee of State Finance Ministers” he failed in his efforts to pass it.
In 2005, it was Mr. Chidambaram, who as Finance Minister in the UPA government, had first proposed the GST — something his successor Mr. Jaitley acknowledged, while moving the Bill for consideration and passage on Wednesday.
Mr. Jaitley’s consensus-building efforts gained momentum with the entry of Mr. Chidambaram in the backroom engagements. He held multiple rounds of talks with his predecessor and Deputy Leader of Opposition and senior Congress leader Anand Sharma, even deputing Revenue Secretary Hasmukh Adhia and Chief Economic Adviser Arvind Subramanian for the technical discussions. The officials were given a free hand in directly making presentations and addressing issues raised by the Opposition.
A lone voice of dissent
The AIADMK was the only party to oppose the GST Bill in the Rajya Sabha and its members staged a walkout. Navaneethakrishnan of the party said in the House: “This Bill is not valid. It violates the States’ fiscal autonomy. It will cause permanent revenue loss to Tamil Nadu. We oppose it.” Noting that federalism is the basic feature of Constitution, he said the Bill violated federalism. Arguing that Tamil Nadu is a manufacturing State, he said the State would lose substantial revenue.
A packed House
There were few fireworks during the debate in the Rajya Sabha on the constitutional amendment to enable the Goods and Services Tax Bill, as most parties were in favour of the Bill, but the day was not without its lighter moments. The importance of the Bill was clear from the turnout in the House, with senior leaders arriving long before the backbenchers. Even before the clock struck two, the two main speakers, Finance Minister Arun Jaitley and Congress leader and former Finance Minister P. Chidambaram, were in their seats.
The Congress’s top leaders in the House, including former Prime Minister Manmohan Singh, Jairam Ramesh, Anand Sharma and Ghulam Nabi Azad, sat through much of the debate, and the treasury benches were full to capacity as well.
Olive branch
The Congress would have been pleased by the many references Finance Minister Arun Jaitley made to the UPA government's attempts to pass the GST Bill when the BJP opposed it, referring to the then Finance Minister P. Chidambaram's first reference to the GST in a speech in 2006. Mr. Chidambaram looked particularly happy with the welcome he received for his first speech in the Rajya Sabha, after he was elected from Maharashtra in June. Teasing him, Deputy Chairman P.J. Kurien said that as it was his “maiden over” he would only be allowed 15 minutes to speak.
Code red
Although it seemed clear from the start that the government’s motion was expected to go through, many Opposition leaders didn’t pull their punches on what they saw as the government’s earlier tough position on the GST which softened only recently. The last word on the matter was had by Sitaram Yechury of the CPI(M), who said that since the Indian Parliament had adopted the Westminster colour model for its decor, the Lok Sabha is green, while the Rajya Sabha is red. “We therefore reserve the right in this House, to show the government the ‘red’ flag whenever it is necessary,” he said.
