Tuesday, May 12, 2015

Modi Suffers GST Setback

The Modi govt was unable to pass the GST bill in the Rajya Sabha, and was instead forced to send it to a committee for review, bowing to opposition obstruction tactics:

http://www.firstpost.com/politics/gst-land-bills-window-modi-narrows-cong-gains-delay-committee-2239788.html

http://www.ft.com/intl/cms/s/0/e9e8da8c-f878-11e4-8e16-00144feab7de.html#axzz3ZySDn7CC

This is a severe blow to the reform agenda. If Modi isn't able to get some major legislation passed soon, then it will look like a toothless tiger.

This is an ominous sign that India may need political reforms before it can pursue economic reforms. A directly elected upper house would probably be the best solution. It might be better for the govt to start a campaign against the upper house itself, to put them on the spot by emphasizing their lack of direct mandate from the people. Once the unelected nature of the upper house becomes a prime topic of discussion, the current Rajya Sabha mafia would be put on the back foot.

The business community, who are the most immediately affected, should be more proactive in raising their voices on this issue, in order to keep it from looking like mere partisan bickering.

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