Indian government pushes for passage of landmark tax reform

The goods and services tax, or GST, is being touted as one of India’s biggest economic reforms in decades [Xinhua]

In last-ditch attempts during the final days of the ongoing Parliament session, the Indian government is pushing for the passage of voting on a bill to create a national sales tax.

Indian lawmakers had delayed votes on bills to create a national sales tax and make it easier to buy land, setting back Indian Prime Minister Narendra Modi’s plans to boost growth in Asia’s third-largest economy.

The government is aiming at passing a bill during an ongoing parliament session that unifies the nation’s 29 states under a single sales tax.

This reforms measure would do away with multiple levies across domestic boundaries.

The goods and services tax, or GST, is being touted as one of India’s biggest economic reforms in decades.

The government on Tuesday introduced the much-awaited bill on GST for passage in the opposition-controlled upper house of the Indian Parliament, the Rajya Sabha.

It has already been approved by the lower house of the Indian parliament, where the ruling party, the Bharaatiya Janata Party enjoys a majority.

A logjam in Parliament over charges of impropriety by the Indian Foreign Minister and corruption charges against a Chief Minister of the ruling party in a central Indian state, has delayed the passage of crucial bills.

The GST bill has been scrutinized by a panel comprising members of the upper house that has endorsed majority of the provisions in a report it submitted to lawmakers.

The panel has suggested changes in compensation to Indian states.

The current monsoon session of the Indian Parliament ends on Thursday.

The National Institute of Public Finance and Policy, a private research group, initially estimated it would add about 2 percentage points to India’s gross domestic product. The bill was diluted thereafter to win political support.

Indian Prime Minister Narendra Modi last week also agreed to drop politically unpopular clauses from a pro-business land bill in a sharp u-turn from his earlier stance.

The bill was meant to make it easier to acquire land.

The opposition parties had rallied with protest groups saying the proposed changes, including exemption from getting consent of 80 percent of landowners for some projects, would harm the interest of farmers.

 

TBP