Modi makes fi­nal mon­soon push to pass tax re­form

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

The gov­ern­ment of In­dian Prime Min­is­ter Naren­dra Modi be­gan a last push be­fore the end of a stormy par­lia­ment sit­ting to pass a ma­jor tax re­form aimed at boost­ing eco­nomic growth, but an op­po­si­tion party dug in its heels to stop the bill.

Aimed at cre­at­ing a cus­toms union for In­dia's 1.2 bil­lion peo­ple, the Goods and Ser­vice Tax (GST) is the big­gest rev­enue shake-up since in­de­pen­dence from Bri­tain in 1947. Sup­port­ers say it will add up to two per­cent­age points to eco­nomic growth.

A se­ries of ob­sta­cles to the prime min­is­ter's am­bi­tious agenda of eco­nomic re­form has in­creased a sense among debt-laden do­mes­tic com­pa­nies suf­fer­ing sub­dued earn­ings that In­dia's fledg­ling eco­nomic re­cov­ery could take longer.

In­dian shares fell about one per cent on Tues­day led by declines in bank­ing stocks along with jit­ters over the par­lia­ment show­down and China's yuan de­val­u­a­tion. As mon­soon rain lashed the colo­nial-era par­lia­ment build­ing, Fi­nance Min­is­ter Arun Jait­ley in­tro­duced the bill in the up­per house to yowls of protest from mem­bers of the op­po­si­tion Congress party. Sec­onds later, the speaker ad­journed the cham­ber, putting off any dis­cus­sion un­til Wed­nes­day. The Congress party is de­mand­ing the res­ig­na­tion of se­nior BJP lead­ers it ac­cuses of graft be­fore al­low­ing par­lia­ment to work. It also wants changes to the bill, which it says has been di­luted to win sup­port from states. "They don't want the In­dian econ­omy to grow," Jait­ley said, barely au­di­ble above op­po­si­tion shouts of "this will not go on". Congress leader Anand Sharma said the ob­struc­tion repli­cated tac­tics by the BJP, which blocked GST and other re­forms when Congress ruled In­dia for a decade, be­fore be­ing de­feated by Modi last year.

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