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GST bill may get two-third backing in Rajya Sabha

However, the backing will only become stronger if the AIADMK decides to support the legislation

Policy Pulse
Publish Date: Jun 8 2016 10:12AM | Updated Date: Jun 8 2016 10:16AM

GST bill may get two-third backing in Rajya Sabha

Counting support of parties that are ok with the current Goods and Services Tax (GST) bill and those who had reservations, it can be figured that the longpending landmark tax reform has now more than two-thirds support needed for its passage in Rajya Sabha.

 

As things stand, around 163 MPs could support the bill, excluding 12 from AIADMK who had concerns but could reach a middle ground or would abstain, as opposed to 65 UPA MPs. The 10 Left MPs have not officially declared their support, but considerable progress has been achieved in narrowing differences with CPM, government sources said.

 

Even an abstention by AIADMK will work to the government's advantage. With 163 MPs in support in a House with an effective strength (if AIADMK abstains) of 229, the GST has the backing of 71% members.

 

As of now, the House has strength of 241, with four vacancies. In fact, after the June 11 election, BJP will gain four, Congress will lose the same number, JD(U) will lose three, AIADMK will gain one and RJD will gain two seats.

 

The government is promising AIADMK that the compensation clause will address the issue. Odisha's ruling BJD has had concerns over royalties for minerals but will support the bill. Tamil Nadu, with a strong manufacturing base, is worried about loss of revenue but the sources are hopeful that given NDA's cordial relations with CM J Jayalalithaa, AIADMK will at least abstain if it doesn't back the bill.

 

However, the backing for the bill will only become stronger if the AIADMK finally decides to support the legislation. The Left indicated its support to the GST bill during recent meetings between Kerala CM Pinnarayi Vijayan and finance minister Arun Jaitley.

 

Though Congress is fairly isolated, it has the numerical strength to disrupt the House, preventing passage of the legislation. As the bill is a constitutional amendment, a vote is required and the House must be in order. Any disruption will effectively stall the bill's passage.

 

The government hopes to persuade Congress to drop its insistence on writing an 18% rate into the amendment bill.