Changing stance of Congress on GST

There is a strong feeling emerging in the political arena that the Congress is softening its stand on the GST issue. There seems to a change from the outright violation of proceedings of the house in the Parliament to a stance of a proper discussion on the issue. The Congress is now coming out with statements about GST being a good concept, but is not happy about the bill proposals. The statement by Rahul Gandhi recently made it clear that Congress is not against the GST but it wants some changes.

The proposed changes as per the Congress party are likely to benefit the consumers and the shopkeepers. The party has come out with three major change proposals. The first one is that there should be a cap of 18% on the GST rate. The current GST proposal defines no limit and there were figures being guessed as high as 25% or more.

The next change demanded by the Congress is the scrapping of the 1% additional tax and doing away with the compensation for local governments in the states. This is a sop given by the Central government to compensate for the loss of revenue to the states on the inter-state taxation on movement of goods across the states. This is an approach adopted by the Centre to get the states on their side in support of the GST bill. The change proposed by the Congress is to break this support and cause disruptions indirectly. A lot of thinking is required to counter this move.

Congress also does not want any exclusion from the GST. They want that the proposed exclusion like tobacco, alcohol and electricity to be included back in the GST list. The Congress wants the government to meet and consult its finance veterans like Manmohan Singh and P Chidambaram on the bill. That does not seem to be a bad suggestion at all and the BJP can definitely have healthy discussions and even meet the Congress leadership on the issue as a prelude to the winter session of the Parliament. This can really set the stage for the passage of the GST bill.

The question is that what could have prompted the Congress to change its stance? For one there is a mounting pressure from the eminent industrialists and public in general. However the Congress has rebuffed the pressure by asking the industrialists to concentrate on their work and leave the parliamentary work to them.

The other point which has prompted the Congress to come to terms is the change in stance of BJP on the GST. They have moved the bill for the centre of attraction to something which they can do without Congress support over a period of time. The Power and coal minister PiyushGoyal has stated that even if the GST bill is not passed, it will not stall the performance of the government. The government is anyway moving ahead with its plan for double digit growth in the next year. The government is also thinking of alternatives like introducing the Central GST first and allowing the states to follow later.

All this has suddenly pushed the Congress from the centre of controversy to the backburner stage. They are already feeling that they have lost the battle, which is why the compromise moves. It is a good strategy by the BJP and we can hope for a political consensus during the winter session of the parliament.

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