The Big Story: The Tax man

A process that began more than a decade and a half ago, when former Prime Minister Atal Bihari Vajpayee first set up a committee to look into it, is set to culminate in the biggest tax reform since Independence on Wednesday as the Rajya Sabha takes up a Constitutional Amendment aimed at bringing in a Goods and Services Tax. The GST will eliminate most other indirect taxes, like excise, octroi and service tax, and instead become a uniform tax with the aim of turning India into one large common market. Finance Minister Arun Jaitely has been so bullish about the reform that he promised a 2% bump in Gross Domestic Product as a result of it.

If the GST Bill is passed, as seems likely, it will represent several things. For one, it is a major victory for this government, since it is easily the most significant legislative achievement. The Bharatiya Janata Party, after initially facing tough opposition from the Congress and other regional parties, has managed to bring everyone on board through various approaches (ditching one Parliamentary Affairs minister in the process) and will have a proper reform feather in its cap afterwards.

But it will also be the beginning of a process that may yet get messy. The Constitutional Amendment will have to be ratified by at least half the state assemblies, and then be followed up by two more pieces of legislation that actually specify how the new tax will actually work. These are expected to be introduced in the Winter Session of Parliament, so GST is unlikely to be in place by the start of the next fiscal year. In between, there is potential for dissent in the ranks over the role of the states and the initial taxation rate.

Nevertheless, passing the GST – a tax prevalent in dozens of other countries – would be the first step on the way to a fundamental alteration of the way India conducts itself. It represents a compromise of federalism, with both the Centre and States giving up some powers with the aim of improving the economy for all.

Wherever this government – which came into power promising development but soon devolved into dangerous cultural warfare – goes from here, if it manages to get the GST passed in the Rajya Sabha and eventually implement the tax, its reformist legacy will be assured.

The Big Scroll
How will we explain our change of stance on GST, Congress members ask leaders. And here's, all you wanted to know about the GST (including when and if it's likely to be implemented).

Political Pickings

  1. After a large turnout greeted her in Varanasi, Congress President Sonia Gandhi suddenly fell ill and had to cut her visit to the prime minister's constituency short. Gandhi has been admitted to a Delhi hospital.  
  2. The Bharatiya Janata Party's Parliamentary Board is set to meet on Wednesday to accept Gujarat Chief Minister Anandiben Patel's resignation and pick her successor. State party chief Vijay Rupani and senior minister Nitin Patel are the most likely candidates. 
  3. Sahara India chief Subrata Roy, out on parole after months in jail, has been quietly meeting political leaders from Uttar Pradesh across party lines. 
  4. A member of the ruling party in Tamil Nadu attributed the ascendance of Hillary Clinton, who last week became the first female American presidential candidate to, who else, Amma. 

Punditry

  1. A day after his fellow partyman blamed the Congress for attacks on Dalits, Bharatiya Janata Party Member of Parliament Udit Raj in the Indian Express bemoans the fact that Dalit issues are broadly seen as problems for only Dalit leaders to handle.
  2. Digitizsng India can help women break the shackles of patriarchy, writes Osama Manzar in Mint.
  3. Justice K Kannan in The Hindu cautions against rushing into a law that liberalises the abortion process, with an argument that sides heavily on the state knowing better. 

Giggles

Don't Miss

Vinita Govindarajan tells us about the stories of Bhavani Amman that abound at the Periyapalayam temple festival in Tamil Nadu.

"According to one such tale, the place where the temple now stands was once a forest where cows from a nearby village used to graze, said Usharani, who works at the temple. At exactly noon, one of the cows would drink water at the river and spray milk on a small rock nearby.

The cowherd could not understand why this cow never had any milk for him and resolved to sell the animal. But before that, he decided to observe the cow for an entire day.

When he saw the cow give all its milk to the rock, he took an axe and cracked the rock into two. Immediately, the cowherd fell, bleeding from his mouth and nose. Out from the broken rock stepped a woman dressed in yellow and red. She told him that if he would build a shrine for her, his life would be spared. And thus was born the Bhavani Amman temple."