Expect thunder and storm this monsoon session of Parliament
The monsoon session of Parliament, which begins on July 17, promises to be turbulent.
The terror attack on Amarnath Yatris should concentrate on MPs’ minds. An all-party resolution condemning the attack and holding Pakistan-sponsored terrorists accountable would signal political unity and maturity.
The BJP postponed commencement of the monsoon session to July 17 to coincide with the day MPs are scheduled to cast their votes in the presidential election. The sight of the JD(U)’s MPs crossing the floor of the House to vote with the BJP will not be a pleasant one for the Congress-led Opposition striving to build a united front against the NDA.
The Opposition though will come well armed. While the battle for President is lost (the election of Ram Nath Kovind is a foregone conclusion with well over 65 per cent votes likely to be cast in his favour), the Opposition will have several opportunities to put the BJP on the mat during the session.
The vice-presidential election is due on August 5, shortly before Parliament recesses. But here too the BJP’s candidate, to be announced soon, will sail through since voting is by MPs of both Houses.
The NDA has over 430 MPs in the Lok Sabha and Rajya Sabha out of a combined strength of around 790 MPs in the two Houses.
By picking Gopalkrishna Gandhi as its vice-presidential candidate, the 18-party Opposition led by the Congress will use the contest to gauge the Index of Opposition Unity (IOU) ahead of the 2019 Lok Sabha election.
All eyes will be on the JD(U)’s Nitish Kumar.
Nitish is a wily politician. Sitting on the fence suits him. It keeps his truculent Bihar partner Lalu Prasad Yadav in check, the BJP on tenterhooks, and the Congress in three minds: will he, won’t he, and when.
All the while, Nitish will calmly stay put in Patna, watching Lalu and his deputy chief minister-son, Tejashwi, slowly self-destruct, and teasing the BJP with the occasional promise of what might be, come 2019.
In this parlour game, politics will prevail over policy. Parliament will be disrupted next week by West Bengal chief minister Mamata Banerjee’s TMC storm troopers trying to stop debates on the Basirhat riots.
The image of a red-faced Derek O’Brien shouting himself hoarse in the well of the Rajya Sabha will be an indictment of the way the House has been run by the outgoing vice-president Hamid Ansari.
GST focus
The Goods and Services Tax (GST) will be the other focus of the Opposition’s attack. While GST’s rollout has been relatively smooth, glaring inconsistencies remain.
Bibek Debroy, himself a part of the government as a member of Niti Aayog with minister of state (MoS) rank, in a recent article in The Indian Express pointed out key infirmities:
“Across goods and services, there should be a single rate for everything and no items should be outside the tax net. You do not leave out liquor, petroleum products, electricity or legal services. Why create an artificial threshold of Rs 1,000 between hotels that have higher room tariffs and lower? There is another threshold at Rs 7,500. For garments, there is a threshold of Rs 1,000 and for footwear, one of Rs 500. Is shampoo a demerit good that it should be taxed at 28 per cent?
“Sure, there is hope that in the long run, there will be no more than two or three rates — a standard one, a merit (lower) and a demerit one (higher). There is the Keynes quote and let me give you all of it, not just the bit that is usually quoted. ‘The long run is a misleading guide to current affairs. In the long run we are all dead.’ ”
The GST is a work in progress, as Debroy points out, and the five principal rates of 5,12,18, 28 and 43 per cent may in time be collapsed to three as he suggests: 18 per cent for almost everything, 12 per cent for merit (essential) goods and 28 per cent for demerit (luxury) goods. The zero per cent rate will continue for most food and other items of daily consumption.
The anomaly over taxing branded (read: MNC) sanitary pads at 12 per cent and imposing rates of between five per cent and 18 per cent for devices for the differently-abled must, however, be removed right away. It is simply wrong to penalise women on the spurious grounds of helping unbranded sanitary pads compete with branded MNC products.
The argument for taxing wheelchairs, braille devices, and hearing aids because their ingredients are taxed is equally disingenuous. The tax involved is so small that in both cases – sanitary pads and devices for the disabled – the hand of thoughtless bureaucrats in the ministry of finance is apparent.
Both taxes must be rolled back. The Opposition will be fully justified in making a meal of it in Parliament next week if they aren’t.
Traders are meanwhile unhappy with GST because their monthly turnover will now be captured through the returns they need to file. They will have to get used to it. In the long term it will professionalise their operations.
The government, after losing part of the argument on demonetisation, is keen to put a shine on the parts that have worked. While it certainly hasn’t wiped out black money, demonetisation has increased the tax base significantly.
Most of the one crore new tax assesses (on a four crore base) in 2016-17 came in after November 2016. Digital payments have leapt by over 300 per cent, easing the way towards transforming India from a cash-dominant economy to a semi-cashless economy over the next few years.
The bickering over demonetisation and GST in Parliament next week will, however, distract from the real gains made since the last Budget session, especially in foreign policy.
Prime Minister Narendra Modi’s rapid-fire visits to the United States, Kazakhstan (for the SCO summit), Israel and Germany (G20) have significantly advanced India’s global strategy.
With a new vice-president (and Rajya Sabha chair) in place soon, the Upper House can look forward to receiving more robust and less partisan leadership than it has in the past ten years of Hamid Ansari’s tenure.
Also read: GST on sanitary napkins: Does Indian government think period blood is a luxury?