It took PM Modi two years to close the deal on GST with opposition. 12 months ago, GST looked a bleeding victim of political turbulence with gloomy future. However, something that is not known in public domain changed the course of GST. So, what did the Modi-led government do? How did Arun Jaitley and Modi convince opposition? Let’s find out –
First step was to build a coalition of 29 state governments to isolate the opposition i.e. Congress party, which was the biggest roadbloack for GST in the Rajya Sabha.
Thereafter, Finance Minister held series of meetings with Congress leaders with an uncertain outcome. During the meetings, opposition’s demand were offered to be met.
A source close to Congress said that growing isolation of Congress on GST issue proved to be a key point in bringing it in favour of GST passage. “They had got themselves into a corner,” said the finance ministry official, who was privy to the talks. “They had two options: strike a deal and come out with your reputation intact, or lose your credibility.”
Simulatenously, effort to being various state governments on board was on from finance minister. The major swing came from West Bengal and then Bihar. Jaitley’s promise to the states to compensate revenue losses for five years, made at talks in New Delhi on July 26, won them over, West Bengal’s finance minister Amit Mitra told Reuters.
On the morning of July, 27 Congress shared a written proposal with BJP, with new language on resolving GST disputes between the Centre and the states. Modi’s cabinet approved the modifications same evening. The rest is history.