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‘Special parliament session only after consensus on GST’

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New Delhi: The Union government will convene a special session of parliament to pass the goods and services tax (GST) bill – a constitutional amendment – only after a consensus is achieved among all political parties, including the Congress and the Left that are vociferously opposing the measure, official sources said.

Photo credit: youtube.com
Photo credit: youtube.com

The GST bill intends to create a harmonised system of taxation by subsuming all indirect taxes under one tax.

Government negotiators have reached out to Congress president Sonia Gandhi, vice president Rahul Gandhi and Leader of Opposition in Rajya Sabha Ghulam Nabi Azad, but the outcome is not encouraging as Rahul Gandhi is still adamant on not supporting the bill till the party’s demands are met and changes accordingly made in the bill.

Finance Minister Arun Jaitley, Parliamentary Affairs Minister M. Venkaiah Naidu and Minister of State for Parliamentary Affairs Mukhtar Abbas Naqvi are talking to all political parties to reach a consensus on GST.

According to government sources, most of the parties are in favour of GST but the Congress and Left parties are still adamant on their stand. However, Samajwadi Party (SP) and the Trinamool Congress (TMC) have conveyed to the government that they will support the bill only after a broader consensus on the issue.

The SP has 15 and TMC has 12 members in Rajya Sabha, where the Congress has 68 members and the NDA 63, including the BJP’s 44. The government requires the support of at least 163 members of the 245-member house to pass a constitution amendment bill.

“There is a group in Congress party which is arrogant and whose imprudence on GST has created confusion. But we are still confident. In coming days, the bill will be passed,” Naqvi told IANS.

“Congress was also committed to GST and their only demand was that the bill be referred to a select committee which was met. The select committee has now submitted its report. The Congress should fulfill its commitment,” he added.

Despite the government’s confidence, it has few options for passing the bill.

A constitution amendment bill can be introduced in either house of parliament and has to be passed by each house by a two-thirds majority of members present and voting.

“GST is a constitution amendment bill. There is no provision for bringing a constitutional amendment through an ordinance or a joint sitting of the house. It must be passed by both houses of parliament. There is no other way to pass a constitution amendment bill,” constitution expert and former Lok Sabha secretary general Subhash Kashyap told IANS

To explore the possibility of passing the GST bill, the Cabinet Committee on Parliamentary Affairs had decided against immediate proroging of the houses when parliament’s monsoon session was adjourned sine die Aug 13.

The sources said the decision to reconvene the monsoon session would depend on the progress the government makes in getting the support of opposition parties on the GST Bill in the Rajya Sabha.

The task before the government is to pass the bill in Rajya Sabha where it lacks majority.

The GST, Constitution (122nd Amendment) Bill, 2014 was introduced in Lok Sabha on December 19, 2014, which passed it on May 6, 2015. It was referred to a select committee of Rajya Sabha on May 14, 2015.

The bill was introduced in the upper house on the penultimate day of the monsoon session after the select committee of presented its report.

Since certain changess are expected in the bill that the Lok Sabha passed, the bill will have to be again passed by the lower house once it clears the Rajya Sabha.

Naqvi said that the government definitely lacked numbers in Rajya Sabha, but as far as the GST is concerned, the numbers are positively in its favour. The government is talking to all the stakeholders with a positive mindset so that the new tax regime can be rolled out from its current deadline of April 1, 2016, the current deadline, added Naqvi.

Once it clears parliament, the bill will have to be ratified by 17 state assemblies before it is sent to the president for his assent.

Naqvi also took a dig at Rahul Gandhi for Congress party’s opposition to GST.

“Somebody’s aggression should not stall the progress of the country. Trying to throw a spanner in the country’s growth story is not aggression. It will boomerang on those people who are trying to stall the progress of the country,” Naqvi said, without naming Rahul Gandhi.

Parliament and state legislatures will have concurrent powers to make laws on GST but only the centre may levy an integrated GST (IGST) on the interstate supply of goods and services and imports.

(IANS)

Next Story

Is NYAY Going To Be A Game Changer for Congress?

The concerns about funds being used for harmful purposes cannot be ruled out. It is due to these challenges many policymakers suggest that instead of making welfare payments to poor households in the form of unrestricted cash transfers the government should focus on in-kind transfers.

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Congress on Friday promised to create one crore jobs across the southern state
Congress state units given more power for 2019 battle- wikimedia commons

By Amit Kapoor & Manisha Kapoor 

The idea of launching Nyuntam Aay Yojana, a cash transfer scheme that intends to provide Rs 72,000 per year to the poorest 20 per cent Indian families, by the Congress Party if it comes to power, has stirred a debate among the policymakers about whether the move is economically viable or is just a tactic by the Congress Party to garner votes in the upcoming general elections.

The discussions are foreseeable, provided that this intervention to ensure basic income to the poor households will cost the country somewhere between 1.5 per cent to 3.4 per cent of GDP, a number higher than the government’s expenditure on healthcare and education. The implementation of NYAY means an additional cost between Rs 3.6 lakh crore to Rs 7.2 lakh crore per year.

To put things in perspective, the expenditure of the proposed scheme is 2.2 times the budget of all centrally sponsored schemes. The party claims that they have worked out all the fiscal calculations before launching the scheme. However, this will be a major dent in India’s budget expenditure and will explode the fiscal deficit from the current 3.4 percent to 6.8 percent.

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An impact evaluation study by UNICEF in Sub-Saharan Africa showed that with the exception of temporary price rise during payment period, cash transfers has no impact on the prices. Pixabay

Apart from fiscal prudence, the other immediate concern surrounding the scheme is the identification of beneficiaries and the database that will be used for this. There is no official income database available with the government at the individual level and since most of the poor work in unorganised rural areas, there is no direct way of verifying their incomes such as through a payroll or income tax.

The proponents of the approach state that a good starting point could be Socio Economic Caste Census of 2011 if one goes by multi-dimensional aspect of poverty. However, one can’t ignore the fact that even if the scheme defines poverty by assets and not income for quick exclusion rules, the data is outdated. A scheme targeted at reducing poverty can’t use data that is seven-eight years old. Even if one ignores that, it should be noted that there are major methodological issues with how data was collected. This is reflected in the discrepancies that exist in the data collected through SECC and other governmental data. A fresh survey for the identification process will lead to possibilities of corruption as in other targeted schemes. For instance, various studies have shown that many people who are not below poverty line have BPL cards.

One should also keep in mind that there exist significant disparities across Indian states and districts in terms of income levels and affordability of basic needs such as education, healthcare etc. Therefore, the same amount that means a lot to a person living in a low-income state or a state that has good access to public facilities such as public hospitals, schools etc would not be enough for a person trying to make a living in a high-income region. As a result, a prerequisite for such a scheme is a detailed regional level survey on income characteristics of Indian states and districts.

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To put things in perspective, the expenditure of the proposed scheme is 2.2 times the budget of all centrally sponsored schemes. The party claims that they have worked out all the fiscal calculations before launching the scheme. Pixabay

Another major concern surrounding the scheme is its inflationary implications. It is argued that the act of transferring cash to the target population will boost their purchasing power, which would lead to an increase in demand for goods and services and, thus, push prices upwards. Advocates of the approach have tried to argue that studies around the world present a lot of evidence to the contrary.

An impact evaluation study by UNICEF in Sub-Saharan Africa showed that with the exception of temporary price rise during payment period, cash transfers has no impact on the prices. However, these evidences should be considered with a pinch of salt. They rest on the assumption that the money will be spent on useful goods, that will help the local economy in becoming more productive. Though this will not be the case always.

Also Read: Food Unites People Across The Globe

The concerns about funds being used for harmful purposes cannot be ruled out. It is due to these challenges many policymakers suggest that instead of making welfare payments to poor households in the form of unrestricted cash transfers the government should focus on in-kind transfers. This idea is supported by claim that in-kind transfers will help by encouraging the consumption of right things, such as healthy food.

Given India’s concerns about rising unemployment rates, jobless growth and the fact that we need to have effective utilization of our young population to gain a competitive edge over other economies, the promoters are trying to project that NYAY can prove to be a game changer. However, for the Indian economy, a better alternative would be to strengthen the existing public services landscape by removing social, political and personal barriers, along with carrying out structural reforms that leads to creation of more productive jobs. (IANS)