NDA’s drubbing may delay GST rollout, pace of reforms

Dated 9th November, 2015

Officials in the finance ministry were awaiting the verdict of the Bihar assembly polls with bated breath to get a sense of how fast the Narendra Modi government can push the Constitution amendment bill to usher in Goods and Services Tax (GST) in Parliament.

The crushing defeat of NDA in Bihar polls is likely to moderate the pace of economic reforms and there is a possibility that the rollout of GST could face a setback. "A victory for the Grand Alliance is only going to increase the resistance to legislative business in Parliament," said a senior official in the finance ministry, who did not wish to be identified.

The government lacks a majority in the Rajya Sabha, and may find it extremely difficult to push through legislative changes with an emboldened opposition. The government's plan to gain the numbers advantage in the Rajya Sabha through victories in state elections has also suffered a setback and is likely to hurt legislation. While the government has said it will press ahead with reforms, the Bihar election results add an element of doubt, experts say.

(This article is published in The Times of India on 9th Nov, 2015)