Monday, August 3, 2015

August 3, 2015 8:10 am

India’s BJP cries foul over tax reform delays

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Arun Jaitley, India’s finance minister, has attacked the opposition Congress party for “obstructionism”, as the ruling Bharatiya Janata party races against the clock to pass a crucial tax reform in the current parliamentary session.

Prime Minister Narendra Modi’s government wants to launch a long-discussed unified nationwide Goods and Services Tax (GST) — often described as a potential “game-changer” for the country’s economy — when India’s next financial year begins on April 1.

But achieving that goal — part of an overhaul of the chaotic existing system of state and local taxes — will require parliament to amend India’s constitution during the current monsoon session of parliament, something that has proven impossible due to the Congress party’s disruptions of the legislative proceedings.

The Congress said it would not allow parliament to function normally until Sushma Swaraj, minister for external affairs, and two state chief ministers from the BJP resign over alleged improprieties in their conduct.

With just nine working days left in the monsoon session, Mr Jaitley published a scathing Facebook post, pointing out that the Congress had been an initial advocate and a consistent supporter of the GST.

He accused the party, which suffered its most humiliating defeat in last year’s national elections, of disrupting parliament for “political reasons”, or because they are “upset with the electorate for their 2014 verdict”, and urged it to “seriously introspect” on its conduct.

“Should its obstructionist tendencies inflict an economic injury on the country,” Mr Jaitley said in the post.

The GST, which would replace the complex patchwork of state taxes and fees, has been described as a potential “game-changer” that would transform India into a genuine single market and boost its economic prospects.

Companies have long argued that the simplification of the existing unwieldy tax system would make it far easier to do business in India, simplify interstate transactions, increase production and accelerate GDP growth.

Even if parliament passes the legislation in the next nine days, New Delhi would face a tight race to launch the GST by April, as the constitutional amendment also requires ratification of half of India’s state legislative assemblies.

Failure to push the amendment through parliament in the current session would almost certainly mean the GST would be deferred until at least April 2017.

Sonia Gandhi, the Italian-born leader of the Congress party who is unapologetic about the party’s parliamentary tactics, said on Monday the BJP had regularly disrupted parliament and impeded the legislative progress when it was in opposition during the previous eight years of Congress rule.

“Today, we have to listen to sermons on parliamentary behaviour from those who not only defended but also advocated disruption as a legitimate tactic when they were in the opposition,” Ms Gandhi said after a meeting with Congress leaders and legislators.

The opposition party has demanded the resignations of Ms Swaraj and Vasundhara Raje, chief minister of Rajasthan, for their alleged help to Lalit Modi, the exiled architect of the riotous Indian Premier League cricket tournament, and of Shivraj Singh Chauhan, chief minister of Madhya Pradesh, which has been rocked by a widespread scandal over medical college admissions and civil service recruitment.
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