NDA govt defiant on new land law, GST

Live Mint,15 May ‘2015,New Delhi

A day after it failed to have its way in Parliament with the goods and services tax bill and amendments to the land acquisition act, the government put up a brave and resolute face with finance minister Arun Jaitley insisting that it would meet the 1 April deadline for the rollout of GST and also pass the land law.

A success for the government would significantly burnish its pro-reforms credentials. It will also make it easier to do business in India. At the moment, the legislative intent of the government, despite its majority in the Lok Sabha, has been undermined by the opposition which is in majority in the Rajya Sabha.

Separately, news agency Press Trust of India reported that rural development minister Chaudhary Birender Singh, on a visit to Kerala on Thursday, said the land acquisition ordinance would be re-promulgated for a third time, given that Parliament had not passed a 2015 bill pending before it to amend a 2013 land acquisition law.

So far, a united opposition has derailed the government’s efforts to move amendments to alter a 2013 land law, terming them anti-farmer. Passage of the 122nd constitution amendment bill for GST was delayed after pressure from the Congress-led opposition forced the bill to be sent to the standing committee of finance.

The land bill was referred to a joint committee of Parliament and the constitution amendment bill was taken up by a select committee of the Rajya Sabha.

“The roadmap which we have now developed of sending the land bill to the joint committee is probably the fastest way to get it through,” Jaitley said at a press conference on Thursday, adding that any suggestions that the joint committee will have are welcome.

This is the second attempt by the government to push through amendments to the land bill in Parliament since it first promulgated an ordinance in December last year.

The 2015 bill does away with a clause mandating the consent of 80% of farmers for private acquisition of land and 70% for public-private partnerships. It also does away with the need for a social impact study involving public hearings examining people affected by acquisitions, including farm labourers. But it includes an assurance of jobs for at least one member of the families displaced by acquisitions.

Jaitley expressed confidence that if the government worked “overtime”, it would manage to stick to the GST rollout time-table.

“I would have been much happier if Rajya Sabha had passed the GST in the budget session itself. I would have not been cutting it too fine, then, for a 1 April 2016 rollout,” he said.

GST aims to economically unify the country and remove barriers across states to make India a common national market.

“The challenge is that once the amendment bill is passed, it has to be ratified by 50% of the state assemblies and the supporting legislation will have to be passed. All this will have to be done in the monsoon and the winter sessions. I am hopeful that we can achieve the rollout date,” he said.

Jaitley added that despite resistance from principal opposition party, the Congress, there is a wide consensus in favour of GST among all political parties except the All India Anna Dravida Munnetra Kazhagam.

“I am confident that the select committee of the Rajya Sabha will also give overwhelming support to GST,” he said, adding that the central government’s push for cooperative federalism has helped it gain the trust of states.

The constitution amendment bill needs to be passed by a two-thirds majority in the Rajya Sabha, where the National Democratic Alliance has the support of 62 MPs. It needs the support of 162 MPs in the 245-member house to pass the constitutional amendment bill.

Reacting to the opposition’s stalling tactics in the Rajya Sabha, Jaitley said, “It cannot happen for bill after bill and session after session. It is a serious question on Parliamentary democracy where the will of the directly elected house is being questioned by an indirectly elected house.”

“The finance minister’s statement is more an explanation and reassurance to the industry that the government remains committed to reforms. But the fact that it had to refer the bills to the select and the joint committee is an indication of the inability of the government to fast-track the reform measures it had promised, given the political compulsions,” said Sandeep Shastri, a political analyst who is the pro vice-chancellor of the Jain University and director of its Centre for Research in Social Sciences and Education. “Given the constitution of these committees, they may not endorse these bills the way the government wants nor in the timeframe it wants,” he said.

According to Jaitley, the economy is recovering.

“Inflation is under control, growth is picking up, fiscal deficit and current account deficit are under control and the services sector is expanding. We have succeeded in pushing through most of our legislative business with regard to management of the economy. Only one or two are left,” he said. “From despondency, we have entered the more positive phase.”

The government is targeting economic growth of 8.1-8.5% in the current fiscal. But this is subject to a pickup in manufacturing, a good monsoon and a cut in interest rates.