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This is an archive article published on May 28, 2011

UPA feeler to BJP,dials Sushil Modi to lead GST panel

The forum seeking to evolve a consensus on the Goods and Services Tax system.

Despite the heated political exchange with the BJP,the government has approached Bihar Deputy Chief Minister Sushil Modi to head the Empowered Committee of state finance ministers — the forum seeking to evolve a consensus on the Goods and Services Tax (GST) system.

Until now,this committee was chaired by Asim Dasgupta,finance minister of the previous Left government in West Bengal. The regime change in Kolkata sparked off considerable speculation on the next chairman,after it became clear that the latest round of elections had improved the Centre’s chances to push for a consensus.

It’s learnt that Finance Minister Pranab Mukherjee contacted Modi a couple of days back and made the offer. While Bihar is in favour of the GST system,the problem for Modi would be his own party,given the stand some of the BJP-ruled states like Gujarat and Madhya Pradesh have taken in the matter. Modi is believed to have referred the matter to his party leadership. The BJP will also have to discuss the issue with Bihar CM Nitish Kumar.

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“The BJP is not against GST,as it is also stated in the manifesto. Let’s not forget,we went ahead with the implementation of  VAT. However,some states have concerns and we have to find a consensus,” Modi told The Indian Express from Patna.

The political terrain is,however,more tricky. Prime Minister Manmohan Singh had claimed that Gujarat’s enthusiasm on the GST ran cold after investigations against former minister Amit Shah in the Sohrabuddin Sheikh case. The BJP contested this claim saying Gujarat had genuine financial concerns.

The Constitutional Amendment Bill has to be passed by a two-thirds majority in both Houses and ratified by,at least,15 Assemblies for it to come into force.

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