It took him more than two years, but Prime Minister Narendra Modi has finally discovered the art of the deal.
Realising that a frontal assault wasn't securing the votes needed for India's biggest-ever tax reform, Modi and Finance Minister Arun Jaitley changed tack this spring, government and ruling party sources have told Reuters.
First, they sought to build a coalition among the nation's 29 state governments to isolate the Congress party, which despite losing heavily to Modi in 2014 had blocked a new Goods and Services Tax (GST) in the Rajya Sabha.
Then, Jaitley held a series of meetings with Congress leaders whose outcome was uncertain right up to the last minute, sources close to the finance minister said.
He yielded to their demands — accepting, verbatim, a clause they proposed for the constitutional amendment needed to make the GST happen, according to a member of the Congress team that included former Finance Minister P Chidambaram.
"Negotiations take place only if both sides are willing to be flexible," senior Congress leader Jairam Ramesh told Reuters. "Both sides were pragmatic."
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An aide to Jaitley said Congress's growing isolation proved decisive in making a compromise possible.
"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."
Last week's unanimous upper-house vote to pass the 122nd amendment to the constitution brings the wheel full circle — the GST was proposed by Chidambaram a decade ago but was stalled by political rivalry.
Introducing a unified sales tax across India's market of 1.3 billion people would mark a bold act of integration at a time of disintegration elsewhere, as Britain exits the European Union and a protectionist, Donald Trump, runs for the U.S. presidency.
The GST vote also addresses how India, as a federation, can implement a one-size-fits-all sales tax — something the United States and EU have been unable to do — by creating a GST Council that brings the centre and the states together.
Tough bargaining on the rate and scope of the tax lies ahead, yet at least the atmosphere has improved, with Chidambaram praising Jaitley's "friendly and conciliatory tone".
That could revive projects that foundered early in Modi's rule, including land and labour reforms.
EARLY STANDOFF
Despite winning India's biggest mandate in 30 years, Modi has struggled to advance his agenda.
Congress, though reduced to a rump opposition, has resisted. As the largest party in the Rajya Sabha that represents the states, it had blocked the GST and derailed Modi's land acquisition bill which critics branded as being "anti-farmer".
While that tactic proved effective, it wasn't winning public support. Congress took hits in state elections and in June lost the Rajya Sabha votes it needed to be sure of stopping the GST.
This was the cue for Jaitley to court the states, with key swing state West Bengal soon declaring its support. In July, he targeted Bihar, while at the same time re-engaging with Congress after nine months of radio silence.
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.
Congress moved to cut a deal, while Modi and Jaitley were ready to offer concessions — including scrapping a levy of 1 per cent on the movement of goods between states — that experts say would actually make the GST a better tax.
On the morning of July, 27 Congress submitted a written proposal, with new wording on resolving GST disputes between the centre and the states. Modi's cabinet approved identical tweaks that same evening.
When it came to the Aug. 3 vote, there were 203 votes in favour, and none against. The amendment passed the lower house on Monday, also unanimously.
It was a first for Modi, who called the GST a "Great Step towards Transformation".
By abandoning confrontation and seeking consensus, Prime Minister Narendra Modi has pulled off his biggest reform yet, securing the unanimous support of both houses of parliament for a planned Goods and Services Tax (GST).
Here's a timeline of how Modi and Finance Minister Arun Jaitley first brought India's federal states on board, before finally closing the deal at a series of meetings with an opposition Congress party that had become increasingly isolated.
TIMELINE
May 19 - Congress, which suffered its worst-ever election defeat at the hands of Modi in 2014, is punished by voters in a round of regional elections.
June 11 - Further losses in elections to the upper house mean that Congress and its fellow holdout, Tamil Nadu's ruling party, would struggle to muster the one-third of votes needed to stop a constitutional amendment to enable the GST.
June 15-16 - Jaitley wins the full support of West Bengal, a key swing state. Congress's anti-GST front is crumbling.
July 15 - Jaitley holds formal talks on the GST with Congress party negotiators for the first time in nine months.
July 17 - At an all-party meeting, Modi urges opposition parties to put national interests above all else and back the GST bill.
July 19 - Jaitley holds a second round of talks with Congress. He also meets Bihar Chief Minister Nitish Kumar, who rules in an alliance with Congress. Kumar is placated by a government offer to delay a controversial piece of legislation and his party publicly backs the GST the next day.
July 26 - Jaitley offers to compensate states for five years for all revenue losses arising from the GST. The states are fully on board.
July 27 - Congress proposes tweaks to the GST amendment. They are approved by Modi's cabinet that evening.
July 28 - Two more meetings are held but Jaitley resists a Congress demand to anchor the GST rate at 18 per cent.
Aug 1 - Congress tells Jaitley it will back the bill.
Aug 3 - The constitutional amendment bill passes the upper house, with 203 votes in favour and none against, after lawmakers from Tamil Nadu walk out.
Aug 8 - The lower house unanimously approves the amendment.
WHAT HAPPENS NEXT
- At least half of India's states and self-governing union territories need to back the GST amendment.
- The GST Council, a forum bringing together the centre and the states, should draft the key terms and scope of the GST. The government's chief economic adviser has recommended a main rate of 18 percent, but many states want it to be higher while Congress wants it to be capped.
- Two new GST bills are expected to come before parliament in the winter session that begins in November. The states, too, are required to pass their own GST bills.
- The government targets a GST launch date of next April 1, the start of India's financial year, although experts say that deadline is likely to slip.