Wednesday, August 3, 2016

History made, much to follow

The Rajya Sabha just passed the historic Constitutional Amendment Bill to enable the introduction of a nation-wide Goods and Services Tax (GST) that will transform India into a unified market by establishing a customs union, thus allowing for governments across the country to make the most substantial changes to the tax framework in the country since the Constitution of India was adopted. The Bill, over a decade in the making, finally cleared the last hurdle with the BJP government led by Prime Minister Narendra Modi making an unprecedented push to bring in the states as well as the Opposition, including the Congress, whose isolation on the issue finally made them see reason.

Of course, it was still a nail-biting finish, with the Congress bringing in a new demand for an assurance that the subsequent GST bill(s) would not be moved as Money Bills (in which case the Rajya Sabha is reduced to an advisory role). It kept with this demand right to the very end till the Dy. Chairman called for a vote, and after the AIADMK walked out, there was a fear that the Congress would do the same. Of course, as Finance Minister Arun Jaitley rightly said, it is an unreasonable demand and the Constitution - which clearly defines Money and Finance Bills - should be followed. But of course, the Congress is no stranger to flouting the Constitution, so it was always going to be close, until LOP Ghulam Azad finally backtracked on behalf of his party.

Right now, the Prime Minister and his team deserve full praise for steering through this important reform unanimously. Former PMs Vajpayee and Manmohan Singh also deserve praise for their contribution. And last but not the least, state FMs that worked overtime to bring this to fruition deserve commendation. India has made history as a single political union. Of course, there is still much to be done. Half the states will have to ratify the amendment, and then the actual GST bills will have to be taken up in Parliament and each and every state. And all this hopefully before Jaitley's deadline of April next year.

However, all those bills will require simple majorities and some complicated technology to back up the system. It will not be easy, but the biggest hurdle of all has been passed. The future is now in our hands.

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