GST Bill listed for Wednesday: Smooth sail likely as BJP issues whip, Congress confirms support

The long-pending GST Bill has been listed for consideration and passage in Rajya Sabha on Wednesday amidst strong indications that the most far-reaching taxation reform in independent India would be supported by Congress and all other major political parties.

The BJP on Monday issued a whip to its members to be present in the House for the next three days during which the party expects the legislation to be passed. The Congress, the main opposition party, has also confirmed its support.

With this, the Goods and Services Tax (GST) Bill, which has been in the making for over a decade and seeks to introduce single indirect tax regime across the country, seems to be set for a smooth sail in the Upper House.

"The GST Bill is listed for consideration and passage on Wednesday in Rajya Sabha and we seek support of all political parties. The mood is in favour of its passage," Parliamentary Affairs Minister Ananth Kumar said.

BJP sources said the whip has been issued in connection with the key reform bill, which has been high on the government’s agenda but stalled by Congress over some provisions.

The BJP-led NDA lacks a majority in the Upper House but has managed to get support of several regional parties on the GST bill.

To bring Congress on board, the government last week cleared changes in the constitutional amendment bill, including doing away with the additional 1 per cent tax by producing states and compensating all states for any revenue loss in the first five years post the GST roll out.

BJP parliamentary party is also meeting today and senior ministers may brief the members about the bill and other important issues on the agenda in the coming days.

BOJ eases further, signals policy review as inflation target eludes

The Bank of Japan has announced a modest expansion of its monetary easing programme, blaming Britain’s decision to leave the European Union as the biggest uncertainty facing world markets.

The Bank of Japan expanded stimulus Friday by doubling its purchases of exchange-traded funds, yielding to pressure from the government and financial markets for action but disappointing investors who had set their hearts on more audacious measures.

The central bank, however, said it will conduct a thorough assessment of the effects of its negative interest rate policy and massive asset-buying program in September, suggesting that a major overhaul of its stimulus program may be forthcoming.

BOJ Gov. Haruhiko Kuroda said the bank will conduct the review not because its policy tools have been exhausted, but to come up with better ways of achieving its 2 percent inflation target — keeping alive expectations for further monetary easing.

Ahead of the meeting, speculation had mounted over the possibility it would take a so-called helicopter money approach that would entail more direct infusions of money into the economy.

Recently, the government downgraded its growth forecast for 2016 to 0.9 percent from 1.7 percent.

The 7-2 central bank decision was to almost double its annual purchases of exchange traded funds to ¥6 trillion from the current ¥3.3 trillion. A fifth of that will be earmarked for companies that meet new benchmarks for investing in staffing and equipment, it said in a statement.

It also doubled the size of a U.S. dollar lending program to support Japanese companies’ operations overseas, to $24 billion.

The BOJ already is injecting about ¥80 trillion a year into the economy through asset purchases, mainly of Japanese government bonds.

The BOJ was under heavy pressure to act after earlier this week Prime Minister Shinzo Abe announced ¥28 trillion in spending initiatives to help support the sagging economic recovery led by his feeble Abenomics policies.

By coordinating its action with the big fiscal spending package, the BOJ likely aimed to maximize the effect of its measures on the world’s third-biggest economy, which is struggling to escape decades of deflation.

“The BOJ believes that monetary policy measures and the government’s initiatives will produce synergy effects on the economy,” the central bank said in a statement announcing the policy decision.

The BOJ maintained its rosy inflation forecasts for fiscal 2017 and 2018 in a quarterly review of its projections. It also left intact the time frame for hitting its price growth target, but warned uncertainties could cause delays.

Ahead of the BOJ decision, Japan reported further signs of weakness in its economy in June, with industrial output and consumer spending falling from the year before.

Core inflation, excluding volatile food prices, dropped 0.5 percent from 0.4 percent in May, while household spending fell 2.2 percent from a year earlier.

Unemployment had fallen to 3.1 percent in June from 3.2 percent for the past several months, but tightness in the job market has not spilled into significant increases in wages that might help spur more consumer demand and encourage businesses to invest in the sort of “virtuous cycle” Abe has been promising since he took office in late 2012 under Abenomics.