Timeline: How PM Modi pulled off his biggest reform – GST
By abandoning confrontation and seeking consensus, PM Modi has pulled off his biggest reform yet, securing the unanimous support of both houses of parliament for a planned GST.
New Delhi: By abandoning confrontation and seeking consensus, Prime Minister Narendra Modi has pulled off his biggest reform yet, securing the unanimous support of both houses of parliament for a planned Goods and Services Tax (GST).
Here`s a timeline of how Modi and Finance Minister Arun Jaitley first brought India`s federal states on board, before finally closing the deal at a series of meetings with an opposition Congress party that had become increasingly isolated.
May 19 - Congress, which suffered its worst-ever election defeat at the hands of Modi in 2014, is punished by voters in a round of regional elections.
June 11 - Further losses in elections to the upper house mean that Congress and its fellow holdout, Tamil Nadu`s ruling party, would struggle to muster the one-third of votes needed to stop a constitutional amendment to enable the GST.
June 15-16 - Jaitley wins the full support of West Bengal, a key swing state. Congress`s anti-GST front is crumbling.
July 15 - Jaitley holds formal talks on the GST with Congress party negotiators for the first time in nine months.
July 17 - At an all-party meeting, Modi urges opposition parties to put national interests above all else and back the GST bill.
July 19 - Jaitley holds a second round of talks with Congress. He also meets Bihar Chief Minister Nitish Kumar, who rules in an alliance with Congress. Kumar is placated by a government offer to delay a controversial piece of legislation and his party publicly backs the GST the next day.
July 26 - Jaitley offers to compensate states for five years for all revenue losses arising from the GST. The states are fully on board.
July 27 - Congress proposes tweaks to the GST amendment. They are approved by Modi`s cabinet that evening.
July 28 - Two more meetings are held but Jaitley resists a Congress demand to anchor the GST rate at 18 percent.
Aug 1 - Congress tells Jaitley it will back the bill.
Aug 3 - The constitutional amendment bill passes the upper house, with 203 votes in favour and none against, after lawmakers from Tamil Nadu walk out.
Aug 8 - The lower house unanimously approves the amendment.
WHAT HAPPENS NEXT
- At least half of India`s states and self-governing union territories need to back the GST amendment.
- The GST Council, a forum bringing together the centre and the states, should draft the key terms and scope of the GST. The government`s chief economic adviser has recommended a main rate of 18 percent, but many states want it to be higher while Congress wants it to be capped.
- Two new GST bills are expected to come before parliament in the winter session that begins in November. The states, too, are required to pass their own GST bills.
- The government targets a GST launch date of next April 1, the start of India`s financial year, although experts say that deadline is likely to slip.