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

The Hindu - - FRONT PAGE - Nis­tula Heb­bar Suhasini Haider

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

Yash­want Sinha

gov­ern­ment.

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.

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