Newsmaker: Sushil Kumar Modi, the return of GST's troubleshooter

His second term as Bihar deputy CM and finance minister sees the politician back in stamping ground of the GST regime

All that has changed is where he will live. In all other aspects, it is as if time had stood still for Sushil Kumar Modi, who is going to swap places with Tejashwi Yadav to move into his bungalow at 5 Desh Ratna Marg, Patna, while Yadav shifts to Modi’s current house at 1 Polo Road. Modi is deputy chief minister and finance minister of Bihar and is — more or less — back in his old job of soothing feathers ruffled by the goods and services tax (GST).

He is good at this. He headed the GST Task Force when the tax was being negotiated with the states (2011-13). In 2012, Modi played a key role in reviving talks over the GST when he was able to establish a purposeful working relationship with then finance minister P Chidambaram. 

Following that, the GST talks began to move forward. “The consumer states will be benefited in the new indirect tax regime of the GST as the tax would be levied on consumption. Bihar is one of the biggest consumer states and hence the poor and backward states will benefit the most with the introduction of the new GST regime,” he told Business Standard recently, adding that the state is expected to witness a minimum growth of 14 per cent in its tax collections and its tax growth could go up to around 25 per cent. 

As the head of the Council, he also did extensive research on how the tax and its roll-out had impacted different countries — Canada, Brazil, etc, so as to be prepared for unanticipated political threats the new tax represented. In an unguarded moment he had told Business Standard then that no government that had rolled out the GST had returned to power — but the incoming government had not dismantled the structure either.

He was one of those who addressed the trust deficit of states squarely: The central government had promised compensation for Central Sales Tax (CST) but fell behind for several years. This led the state government to ask if the Centre would do the same when it promised compensation for tax lost when they opted for the GST. It was not an easy negotiation. “We had to face the anger of the state governments,” he said. But of course, in 2013 the Bharatiya Janata Party went out of power in Bihar following the snapping of ties with Janata Dal (United). Modi resigned as finance minister and also as GST Council chief.

In his resignation letter he flagged the same issue — of trust between the Union government and the states — as the single most important element in getting the GST passed. Then Nitish Kumar changed his mind about his alliance partners. It was a bloodless coup, and it was Modi who got a call from the Prime Minister, directing him to take oath as deputy chief minister and finance minister of Bihar, again.

Modi will now head a five-member group of state ministers to look into technical challenges being faced by the GST registration and tax filing portal as authorised by the GST Council, the highest decision-making body of the new tax regime. The group will have its first meeting later this week.

Modi will have to address day-to-day practical problems of implementing the GST: Why websites are crashing when people try to file the GST, what the back-end glitches are and, most importantly, how to take upon himself the responsibility of defusing anger of (relatively) small traders who are at once repelled and frightened by new-fangled ways of doing business, especially the intervention of technology.

Inasmuch as it matters, Modi is fascinated by technology. His first attempt at business was the launch of the Modi Computer Institute in 1987, taking a Rs 70,000 loan from a bank. He had just married Jessy George, a Roman Catholic who had grown up in Mumbai (the two met on a train ride to Bombay — she was on a trip to go birdwatching). “I had just got married and had a family to take care of,” he told Business Standard with a laugh. 

Business was not for him and it closed down with him returning to active politics. As an Akhil Bharatiya Vidyarthi Parishad (ABVP) activist, he had participated in Jayaprakash Narayan’s anti-Congress movement in 1974 in Bihar, with other friends: Lalu Prasad and Nitish Kumar. He was arrested five times under the repealed Maintenance of Internal Security Act and jailed for a total of 24 months during the Emergency. 

This was after his family had “invested’’ in him: He was sent to three schools, two of which were run by missionaries. He came second in the Botany department at Patna University in 1973 (he was expected to fail but in the last one month before the examinations he gave his all to studies) but quit MSc to join full-time politics. 

The business may have failed but gadgets continue to enthral him. He reads newspapers on his smartphone and the bets in Patna are on how soon he will acquire the newest iPhone — he junked his BlackBerry for an iPhone a long time ago and also has the latest iPad.

There is no one better than Modi to get to the bottom of fears and threats. In this case, there is a lot at stake.