After some progress over the past few months, the talks between the Centre and the states over the Goods & Services Tax (GST) might take a hit again, as Sushil Modi ceases to be the Chairman of the Empowered Committee (EC) of State Finance Ministers after the BJP-JD(U) split in Bihar.
Modi, who would no longer remain Bihar's deputy chief minister and finance minister, could shortly submit his resignation as EC head and the search would begin for a new chairman, who could provide a link between and the Centre and ardent opponents to GST like Madhya Pradesh Finance Minister Raghavji.
Finding a new chairman would not be easy, as both the EC and the Centre prefer a candidate who is unbiased, has some technical understanding of the issues, comes from a large state, and is acceptable to most of the other member states. Unfortunately, no state finance minister fits the bill at the moment.
"The person should preferably be a non-Congress candidate and with a stature. Anybody you bring in at this stage will take time to rise to that level," said a finance ministry official.
West Bengal Finance Minister Amit Mitra has a good understanding of the subject, but the "mercurial nature" of his boss Mamata Banerjee might scuttle his chances. Raghavji and his Gujarat counterpart Saurabh Patel are apt for the post, except the fact that they are opposed to GST. Kiran Chaudhary from Haryana is another contender, but hails from a Congress-ruled state and would also have to face elections shortly. Same is the issue with AK Walia from Delhi, who represents Sheila Dikshit in EC meetings.
Despite opposition from his BJP colleagues Raghavji and Patel to GST, Modi's near-two-year stint as EC Chairman saw the Centre and the states build consensus on some of the areas of GST, particularly after P Chidambaram took charge as the Union Finance Minister in August last year.
"Modi has been an excellent chairman. He was very progressive and took everyone together. Now we have to look for someone who can help take forward the talks on GST," said one EC member.
Modi was elected EC Chairman on July 18 after Asim Dasgupta resigned from the post after losing out in the Assembly elections in West Bengal.
Technically the EC chairman is appointed by the EC members. But after Dasgupta's exit, then finance minister Pranab Mukherjee, now President, invited Modi to head the EC. Modi initially declined the offer but later accepted it after a discussion with his party members. It was believed that Mukherjee played a trump card by proposing Modi's name for the post, as a neutral and experienced person like him could have helped convince BJP-ruled states to move ahead fast on GST.
This time also the Centre may propose a name, but the decision to select the next chairman now rests with the general body of the committee, which comprises state finance ministers, a member secretary, and one additional secretary from the Union finance ministry.
The post is likely to be filled up through a consensus among the members of the general body. The rules of the committee mention about the chairman, but there is no mention of the "election" of the chairman. The general body may now have to define the rules in case there is an election between two or more candidates.
Dasgupta, the first head of the EC, was appointed by then finance minister Yashwant Sinha. The process of selecting the chairman is different now because EC is a registered society. When Dasgupta was appointed it was just a panel for monitoring implementation of the Value Added Tax. Initially, Dasgupta was the Convener of the committee.
