Congress supporting Modi on GST movement

Dated 3rd November, 2014

India’s main opposition Congress party signaled it would back several laws that are key to Prime Minister Narendra Modi’s efforts to revive the economy during the winter session of Parliament this month.

Congress will conditionally support measures to pass a goods and services tax (GST), allow more foreign investment in insurance and allocate coal mines transparently, according to Abhishek Manu Singhvi, a Congress member of the Rajya Sabha. The party had proposed the moves before losing power to Modi’s Bharatiya Janata Party (BJP) in May.

“We will give constructive support in principle, but with the very specific caveat that both god and the devil lie in the details,” Singhvi said on Monday in a phone interview. “These are bills which we have moved, and we are not hypocritical.”

Opposition support is crucial to Modi’s efforts to revive Asia’s third-biggest economy after winning the biggest Indian election mandate in 30 years. While his BJP controls the lower house of parliament, it holds less than one-fifth of seats in the 245-member upper house.

During the last parliamentary session in August, opposition members of Parliament blocked Modi’s attempt to pass a Bill that would raise the foreign ownership cap in the insurance sector to 49% from 26%.

“Congress is realizing that a confrontationalist attitude will not yield long-term results,” Subrata Mukherjee, an author and retired political science professor in New Delhi, said by phone, adding that it will be difficult for Modi to make major changes without opposition support. “This is a sign of a paradigm shift in India’s political culture.”

Modi plans to enact GST by the end of the fiscal year in March, a move that would allow India to have a single internal market for the first time. He had opposed the measure while he was chief minister of Gujarat.

Modi also last month approved a decree enabling it to permit commercial mining in the future, a step toward ending a four-decade-old government monopoly on mining and selling coal. Successive governments have failed to push through a Bill first introduced in April 2000 that would allow mining and sale of coal commercially due to opposition from trade unions.