BJP firm on opposing VAT regime

VAT panel chief calls on advani

West Bengal Finance Minister Asim Dasgupta called on BJP President L K Advani and former finance minister Yashwant Sinha to persuade the party to relent on their anti-VAT stance.

Dasgupta, chairman of the empowered committee on VAT, was assured that the BJP's objections were "just political".

According to party sources, both Advani and Sinha heard Dasgupta out but said their political compulsions would not allow any change in their opposition to the tax regime.

It was the BJP-led NDA which had set the April 1 deadline for the implementation of VAT when it was in power, but last month the BJP-ruled states refused to comply with the deadline saying that they would not implement the tax until all the states agreed to do so.

The opposition of the chief ministers of the BJP- ruled states came as a surprise to the Union government, which had assumed that the VAT regime, primarily pushed by the NDA government, would find ready takers in these quarters.

The about turn, sources said, had more to do with the fact that Uttar Pradesh Chief Minister Mulayam Singh Yadav had said no to VAT.

"Traders form the main constituency for the BJP. With the party on a decline in the state, it will be political suicide for us to appear pro-VAT, while Mulayam opposes it," said a senior party leader.

The anti-VAT campaign within the party began nearly three months ago, party sources reveal. Trade delegations led by Shyam Behari Mishra, president of the Bharatiya Udyog Vyapar Mandal, started meeting top BJP leaders.

"Mishra is a four-time MP from Uttar Pradesh and explained the matter in political terms to the senior leaders," the party source said. Mishra managed to convince the party brass that opposing VAT till Uttar Pradesh did so was the wisest course to take.

The experience in Haryana was also not encouraging. "Even though the state's revenue increased after VAT, the feedback from the traders was that the BJP and the INLD (a former NDA ally) would suffer politically," said a BJP office-bearer.

"The Left Front, of course, should also remember that a former finance minister in West Bengal, Ashok Mitra, has filed a case in the Calcutta High Court against the implementation of VAT," he pointed out, indicating that whatever the economic merits of VAT, its political costs were high.

Despite all this, Advani today assured Dasgupta that "the BJP had nothing against VAT in principle". In fact, this prompted Dasgupta to declare that the BJP's opposition had nothing to do with economics and everything to do with politics.

"At least 21 states have agreed to the implementation of VAT," he said at a chief minister's conference convened over the issue.