Prospects brighten for breaking GST logjam

New tax will be a game-changer, says MoS Finance Jayant Sinha.

November 28, 2015 03:03 pm | Updated November 16, 2021 04:19 pm IST - New Delhi

Union Finance Minister Arun Jaitley with MoS Jayant Sinha (left) during a meeting in New Delhi. File photo

Union Finance Minister Arun Jaitley with MoS Jayant Sinha (left) during a meeting in New Delhi. File photo

Minister of State for Finance Jayant Sinha on Saturday expressed the hope that the Goods and Services Tax would be implemented soon, and prove to be one of the biggest game-changers in India’s history.

The GST constitutional amendment bill is stuck in the Rajya Sabha, having been passed in the Lok Sabha in May.

“On GST, we are hopeful, we remain hopeful,” Mr. Sinha said, while speaking at the 110th annual general meeting of the PHD Chamber of Commerce.

Mr. Sinha spoke about the various tax-related initiatives — including GST and slashing corporate tax — that the government will be taking to improve the climate for business.

More talks indicated

His statements came a day after Prime Minister Narendra Modi reached out to his predecessor Manmohan Singh and Congress president Sonia Gandhi to discuss differences over the GST Bill.

Neither side officially said that a resolution had been reached, but hinted at more talks in the future.

It was a chance meeting between Mr. Modi and Dr. Singh at Congress spokesperson Abhishek Manu Singhvi’s son Avishkar’s wedding in Delhi that led to Friday’s meeting.

Top sources in the government and the Congress have confirmed that Mr. Modi was keen to break the parliamentary logjam, especially over this critical tax reform. And that he decided to contact the Congress president directly, after Dr. Singh advised him to do so.

“The two met by chance at the wedding and, as it happened, the conversation veered to the parliamentary logjam,” said a source in the party. “The government’s parliamentary managers had been quite exasperated as they didn’t feel that they were able to establish communication with the Congress’s floor managers. Or even if they were speaking, there was no outcome to those talks. When this was conveyed to Dr. Singh, he just said that while the Congress’s floor strategy was not in his domain, the Prime Minister could reach out to the Congress president directly,” the source said.

The next step was another personal outreach, that too, involving a wedding.

Finance Minister Arun Jaitley met Congress vicepresident Rahul Gandhi to invite him for his daughter’s wedding scheduled for December.

“This was the most public, high-level icebreaker,” a source in the BJP said.

Top sources in the government said this outreach was followed up by the Prime Minister’s office as a call was made on Thursday evening.

This resulted in the meeting on Friday.

Government sources said while no assurance has been secured from the Congress on support for the GST, the process will now move forward on specifics between Congress leaders and Union government ministers, including Mr. Jaitley and Minister of State for Commerce Nirmala Sitharaman.

However, reports that the government had decided to concede two out of three contentious amendments to the existing Bill after Friday’s meeting were dismissed by the leaders. “We are keen to bring in the GST in this session,” said Parliamentary Affairs Minister M. Venkaiah Naidu.

Sources also said the government now wants to maintain this spirit of outreach, therefore, the moment the meeting between the Prime Minister Narendra Modi and the Congress president Sonia Gandhi and Dr Singh ended, phone calls were made to leader of the Congress in Lok Sabha parliamentary party Mallikarjun Kharge, party’s chief whip in the Lok Sabha Jyotiraditya Scindhia, leader of the Opposition in the Rajya Sabha Ghulam Nabi Azad and his deputy Anand Sharma.

The government is keen to break the negative image that the parliamentary logjam in the last two sessions has have engendered in popular perception. The real challenge for them, however, will be to convince the Congress that it too stands to gain by meeting the government half-way on crucial legislation.

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