Jaitley must resign, says Yashwant
The former Union Minister and BJP leader says the Union government cannot be run on the basis of rhetoric alone and it has to deliver
Former Finance Minister in the Vajpayee government Yashwant Sinha has said the dramatic review of the GST regime at the latest meeting of the GST Council in Guwahati was an admission that the tax system — as implemented since July — was “deeply flawed.” It was, he told The Hindu ,an admission of failure by the government, an admission that should necessitate the resignation of Finance Minister Arun Jaitley.
Calling both demonetisation and GST as failures of the government, the former Union Finance Minister says an excellent concept like the GST is earning ill-repute because of the manner of its implementation. Excerpts:
On GST, what do you make of all the changes announced recently and do you concur with the Opposition’s demand that there should be no 28% slab?
The first thing we have to remember is that the GST rate slabs and the items for placement in each slab was not done on a clean slate. There was a central VAT (value added tax) that I had introduced in 2002 [as Finance Minister], and there was State VAT and all the items had already been fixed to one slab or the other. Now, the most important thing that the GST Council had to take into account was a revenue neutral rate — the idea being that there should be no loss to the exchequer, either of the States or the Central
If GST was to be a “good and simple tax”, it should have had one rate. Most countries that have adopted the GST have one rate. If that was difficult, then they should have probably fixed two rates, one for State GST and one for Central GST, if even that was not possible then they should have gone by my formula of merit, demerit and mean rate. But I don’t know what came over the GST Council and what kind of leadership was provided by the Finance Minister to the council that they went for five rates plus cesses that made it very complex.
On that very day, I said it would lead to lobbying, litigation, as here the logic is not clear.
So, when you go through all these mistakes that were made, the only conclusion you can come to is that the Finance Minister did not apply his mind.
Every rollback is an admission of failure, and a massive rollback of 177 items in one go only proves the scale of the failure.
Is the GST regime now irretrievable from the confusion it has got into?
An excellent concept like the GST is now earning ill-repute because of the manner in which it is being implemented.
My suggestion is that it was the Vijay Kelkar committee that recommended the GST in its 2003 report — he is the most knowledgeable person on this. The government should now set up a small team under Vijay Kelkar’s leadership — just two or three people, they should work closely with the council at the ministerial level and there should be close interaction between the two. This committee should closely examine the entire thing including the filing and they should come to a conclusion say within two months, so that by December-January, the whole thing is finalised, changes incorporated in the Budget that is in February and by April, 2018, we really make it a “good and simple tax.”
Your son ( Jayant Sinha) and you are now famous for your differences. How do you react to it all?
In the school of politics in which I was brought up — Chandrashekhar, Advani, Vajpayee, including my original source of inspiration Jayprakash Narayan — personal relationships are kept separate from political relationships.
You can have serious political differences and be the best of friends on a personal level. By the same token, family relationships are also kept separate.
A month ago you said you will not demand Finance Minister Arun Jaitley’s resignation but you seem to have changed your mind?
A month ago I had said I was not calling for his resignation, but given the kind of admission of the fact that the original scheme for GST was deeply flawed, then it’s quite obvious that this Finance Minister should not continue in his post.
You are alluding to a change in political culture. What is the difference, in your view, from before?
The political culture I grew up in was characterised by separation of political and personal relationships and the second was of democratic consensus. All these leaders with whom I worked, operated on the basis of consensus. Nobody tried to impose his will over the rest of his colleagues or party. There was much greater bonhomie; it was an entirely different thing from one noticed now. The Government of India cannot be run on the basis of rhetoric alone, it has to deliver.
Are you worried about 2019?
I am worried. I am raising these issues because I am worried about the party’s future. I would like the party to improve on its 2014 mandate in 2019, and therefore, the issues I have raised must be taken care of.
Every rollback is an admission of failure, and a massive roll back where you rollback 177 items in one go only proves the scale of the failure
What you are saying is that the Prime Minister is controlling the government, the Finance Minister should go, you see as failures the policies — demonetisation and GST — the government is campaigning on. Why are you even in the party?
The answer is simple. I have given my blood and sweat for this party, it is as much mine as it is anyone else’s. From 2004 when we lost, till 2014, who was struggling against the UPA, in Parliament and outside? I was one of them, certainly. So why should I leave?
You said the Prime Minister and the Home Minister have not agreed to meet you. Yet when you went to Kashmir, it was generally believed that you had gone with their backing in some form. Was that untrue?
There was no truth in that. I had not asked the party nor had they given me instructions, and I made it clear when I landed in Srinagar that I was not there on behalf of the party or government. Almost two years since we first went, the government has done exactly what we told them to do: to appoint an interlocutor, start speaking to everyone including the Hurriyat, as they had promised in the alliance document.
How important is dialogue with Pakistan , given that we have none at present?
We cannot resolve the Kashmir issue without involving Pakistan at some point ... the issues that have come up with the people of Kashmir and the Government of India have to be tackled directly with talks.