Even Sushil Kumar Modi, the deputy chief minister of Bihar and chairperson of the empowered committee of state finance minister on Goods and Service Tax (GST), knows that while the “historic” Bhuwaneshwar meeting may have achieved a “broad consensus” on the tax, a consensus itself is still long way ahead.
Still, Modi deserves his moment in the Sun. After years of disagreement, he has finally managed to pull off an agreement on the nagging issue of CST (Central Sales Tax), thus accelerating the move towards a unified tax regime. Early this week, the Centre cleared a Rs 34,000-crore package for the losses that the states would incur on CST after GST comes into force, and agreed to make changes to the Constitution Amendment Bill for GST.
‘Broad consensus’ was what Modi had been painstakingly trying for ever since Prime Minister Manmohan Singh pulled him aside after a meeting with Bihar Chief Minister Nitish Kumar in Delhi in April 2012 and asked him to patch up a deal on GST.
Initially, Modi was not keen to take up the task. He had refused to be the chairperson of the committee in 2011, but later agreed to it after the intervention of President Pranab Mukherjee, then the Union finance minister. Modi had to not only convince the Bhartiya Janata Party ruled states, but also the central leadership of his party, which had several reservations on GST. Things seemed doomed for failure in February 2012 when union ministers categorically told him that GST would not become a reality in the second term of the United Progressive Alliance (UPA) government. Soon came another blow when the government announced that there would be no CST compensation for the year.
However, the tide changed in Modi's favour after P Chidambaram took charge as finance minister in October.