Pranab, Asim to discuss GST deadlock today

After the BJP-ruled states led the latest round of dissent over the Centre’s proposal to roll out the much-awaited Goods and Services Tax (GST), Finance Minister Pranab Mukherjee would hold an emergency meeting with Asim Dasgupta, West Bengal Finance Minister and chairman of the empowered group of state finance ministers, on Friday.

The latest resentment from the BJP-ruled states had come as a bolt from the blue for the finance ministry, top officials told Business Standard. Just before the Parliament session started on July 26, Finance Minister Pranab Mukherjee held a luncheon meeting with Sushma Swaraj and Arun Jaitley, Leaders of Opposition in the Lok Sabha and Rajya Sabha, respectively, and veteran BJP leader L K Advani. In that meeting, the three leaders agreed to the need for GST and asked Mukherjee to go ahead and place the draft Bill on GST in the current monsoon session.

The BJP leaders, however, also mentioned that among all the BJP-ruled states, only two — Uttarakhand and Madhya Pradesh — had reservations about the draft Bill. The top BJP leaders have categorically conveyed to the government that even their high-profile chief minister of Gujarat, Narendra Modi, understand the importance of GST and favours its rollout in 2011.

The central leadership of the CPI(M), another Opposition party, has also pledged support even as Kerala Chief Minister Thomas Issac raised objections over the veto power of the Union finance minister. A prominent politburo member of the party said, “We are on board with the government on the GST issue. Our own finance minister of West Bengal is heading the empowered group of ministers. How can we oppose it?”

But only the Left’s support will not be enough for the government to go ahead and pass the constitutional amendment Bills in Parliament. It requires two-thirds majority in both Houses and then majority states will have to ratify the Bill. If the BJP-ruled states refuse to endorse the Bill in their respective state assemblies, the constitutional amendment Bill cannot be implemented.

Mukherjee is trying to convince the BJP on the ground that even the party’s election manifesto spoke about the introduction of GST. If the BJP-ruled states remain adamant and finally the government faces yet another setback, the Congress might launch an aggressive campaign to highlight this “double-standard” of the main Opposition party.

A section of the Congress also feels that the CBI case against Gujarat minister of state for Home, Amit Shah, has complicated the matters further and the BJP is now trying to take a political revenge on the Congress.

On Wednesday, states ruled by BJP and other opposition parties objected to the proposal of giving veto to the Union finance minister. They also opposed other elements of the Bill such as setting up a disputes settlement authority under the Constitution and taking away fiscal autonomy of the states to lower or increase taxes.