On the day the Supreme Court cleared the decks for Harish Rawat to return as chief minister of Uttarakhand, Finance Minister Arun Jaitley, speaking in Rajya Sabha in the context of the GST Bill, urged MPs not to hand over budgetary and taxation powers to the judiciary. He also claimed that the judiciary had been encroaching on legislative and executive authority.
“Step by step, brick by brick, the edifice of India’s legislature is being destroyed,” Jaitley said during a discussion on The Appropriation (No.2) Bill 2016 and the Finance Bill, 2016. Both Bills were passed by Rajya Sabha and returned to Lok Sabha.
Responding to the Congress’s demand for a dispute redressal mechanism under which a judge would resolve any dispute between the Centre and states on GST, Jaitley said, “For heaven’s sake, I beseech you in the interest of Indian democracy not to go on this misadventure… With the manner in which encroachment of legislative and executive authority by India’s judiciary is taking place, probably financial power and budget making is the last power that you have left. Taxation is the only power which states have.”
“It would be wholly misconceived for any political party to say, ‘let us hand over the taxation power to judiciary’. That is your (Congress’s) proposal,” he said.
“We will have budget-making going outside Parliament and if there is a taxation dispute between the Centre and states, a major party says now let the judge decide, so taxation power also goes,” he said, adding that taxation is a political issue and should be sorted out politically.
Jaitley said that despite the National Disaster Response Fund and State Disaster Response Fund, the Supreme Court has asked the government to create a new fund for disaster mitigation. “We have passed the Appropriation Bill, how do I get this money from outside.“There cannot be any expenditure unless approved by Parliament,” he said.
Earlier, Congress leader Jairam Ramesh claimed that “real opposition to GST is coming from within sections of the government, and the Congress is being used as an alibi and smokescreen”. He added that the Congress was ready to support the GST Bill if three main recommendations are accepted.
“We have three suggestions. One is setting up of an independent dispute settlement mechanism, elimination of extra one per cent tax (on inter-state movement of goods) and introduction of upper cap on GST rate… If consensus on these three is arrived, we are ready to support,” he said.
He also questioned the credibility of the current GDP growth figure of 7.6 per cent, claiming that neither the Chief Economic Advisor, the Governor of RBI, the London Economist, Wall Street Journal, investment bankers or research scholars believed it. “The numbers put out by the government are highly suspect. For the first time, the credibility of our GDP numbers has become an international issue,” Ramesh said.
Ramesh also raked up the issue of alleged irregularities by the Gujarat State Petroleum Corporation (GSPC) in its KG basin gas project. He demanded a probe and asked the government not to be selective in investigating NPA cases, be it private or public companies.
“What about a company (GSPC) which has taken loan of about Rs 20,000 crore and has to pay Rs 1,800 crore annually, while its income is only Rs 80 crore. Is it not a fit case of NPA?” the Congress leader said.
During his reply, Jaitley asked the Congress to either reconsider its three preconditions or allow a decision on the GST bill by vote.
Addressing Congress leader Anand Sharma, Jaitley said, “I will certainly be discussing with you and your colleagues.” He added that the government would like to take up the GST bill in the monsoon session of Parliament.
On the demand for an 18 per cent GST tax cap in the Constitution, Jaitley said there was no concept of such a cap when the UPA came out with the GST Bill, when it was referred to a Standing Committee, when the committee’s recommendations were released, or when these recommendations were finalised.
Stating that he had “no difficulty with the figure of 18 per cent”, Jaitley asked what would happen in case of a drought when some affected states want to impose a higher tax for a period of just one year. “Should we amend the Constitution in such a case? We know how difficult it is,” he said.
He also said there cannot be a uniform tax for commodities used by the “aam aadmi” and products such as luxury cars.