GST Over Tea, Mrs Gandhi?

During the meeting with Modi on Thursday, Congress party leaders put forth their position on the bill.

Prime Minister Modi will intervene and conclude the debate in the Parliament on the Constitution, on the second day of the Winter Session today.

Shortly after it was announced yesterday that Modi had invited Congress president Sonia Gandhi and his immediate predecessor in the prime minister’s office, Manmohan Singh, for discussions over tea, Rahul Gandhi had said that the government had been forced to take such a step.

Taking about the current status of the landmark bill, Naidu added that Finance Minister Arun Jaitley has held extensive consultations with various states and that the bill has been referred to the select committee and they have made their recommendations. Gandhi and Manmohan left Modi’s official residence by auto without talking to reporters.

Financial markets ticked higher on Friday as TV channels flashed news that Modi had for the first time reached out to Gandhi.

The prime minister had invited the Congress leaders to discuss issues pending before parliament, particularly a large amount of legislative business that has accumulated over the last two sessions. Her son and heir-apparent Rahul, the target of a series of public attacks by the BJP, did not attend the talks.

“The centre might agree to the 18 percent limit on GST and waive off the 1% levy for manufacturing states”. The Congress has repeatedly accused the government of failing to bring the opposition on board on GST, billed as the biggest tax reform since independence.

The flip side to the passage of the Bill lies in the concerns raised by the Congress. The party has objected to states being given the power to levy an additional one per cent tax on the supply of goods over and above the GST rate. It can not be denied that despite gaining momentum, India’s GDP growth is stuck at 7.3 per cent. Passage of the Bill will ensure that it breaks this barrier.