GST: the dubious calculus of political gain

Livemint, May 08, 2015

The acrimonious debate over the goods and services tax (GST) is a good example of where the priorities of India?s political parties lie. The Congress walked out of the Lok Sabha on Wednesday when the Constitutional amendment Bill required to create GST was introduced. The National Democratic Alliance (NDA) government mustered sufficient strength to get the Bill through the Lok Sabha but it is likely to confront headwinds in the Rajya Sabha.

It is clear that the Congress is behaving in an opportunistic fashion: until the last year, when it was the ruling party in Delhi, it was trying to get the Bill passed. The Bharatiya Janata Party (BJP), which opposed the Bill until last year, now wants to get it enacted fast. The short-sightedness of it all is inescapable. Both parties can marshal justifications for their claims?the rate of taxation, exemptions under GST and loss of revenue to states?but that does not take away the fact of their opportunistic behaviour.

The GST Bill is only one example of the increasingly transactional nature of Indian politics. Every Bill is now subject to penny-pinching calculations for political gain. The Insurance Laws Amendment Act, 2015?which was passed by Parliament in March?is another example of the twisted logic of Indian politics. Since 1997, parties in power have known the value of liberalizing the insurance sector. Just like the GST Bill, the insurance amendment Bill was opposed by the big parties when they were out of power. But no sooner did they enter the portals of government, the role reversed. Ultimately, the law was passed but it had to wait almost 18 years. The opportunity cost of not passing the law earlier cannot be estimated.

Logically, the way to end logjams of this sort is to keep economically and strategically important pieces of legislation away from the rough and tumble of partisan politics. But that is the rub of the problem: in the last two decades almost all spheres of governance have got embroiled in politics. At one time, national security and foreign policy issues were kept away from the calculus of gain and loss. That consensus, too, is fraying. From issues such as the prime minister not visiting any Muslim country in the first year of his tenure to acrimonious debate over sinking of vessels on the high seas, everything is open to question.

The blame for this state of affairs lies with both the Congress and the BJP.

By now, the BJP?s innumerable walkouts from the 15th Lok Sabha (2009-2014) are history. But that Lok Sabha was probably one of the least productive in the history of Parliament. The GST Bill, which the NDA government is trying so hard to get passed, was subjected to the same mercies which the Congress is displaying today. One of the staunchest critics of the GST Bill was the then chief minister of Gujarat, Narendra Modi. Today, the boot is on the other foot.

The Congress?s current opportunistic behaviour is also short-sighted. Today it finds itself in the opposition ranks; tomorrow that may change. The bitterness being generated today will not go away if it becomes a ruling party at some point.

Matters can, of course, continue like this for a long time. But the costs will be huge. Legislation needed to run the country smoothly will languish. Institutional imbalances between the judiciary, the executive and the legislature will continue to widen. The country will lose. It is not easy to put an end to this myopia. One can say that countervailing institutions can be created to shield vital legislative and executive business. For example, the creation of a rail tariff authority (a step mooted by the United Progressive Alliance government but in limbo at the moment) and a fiscal council to keep expenditures in check are two examples of such institutions. The trouble is they require, at the minimum, a bipartisan consensus between the BJP and the Congress. It is the stuff of dreams to expect that.

The great lesson of Indian parliamentary life is that give and take is essential to run the country. From Jawaharlal Nehru to Atal Bihari Vajpayee, all great leaders imbibed it well. One can only wish that our current leaders understand this.

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