Party pooper: VAT may go off the track

NEW DELHI: With the state units of BJP joining forces with those campaigning against the introduction of VAT, the Centre has lost its zeal to usher in the new sales tax regime by April 1.
Even as the increase in the number of states averse to the change — Kerala, Tamil Nadu and Madhya Pradesh jumping on to the opposition bandwagon on Friday — has all but jeopardised the grand plan to bring in VAT, the Centre is unable to go ahead with the reforms because of the resistance in its own backyard.
The BJP unit in New Delhi, which is competing with Congress to appease the traders'' lobby in the run-up to the elections, is at the vanguard of the protest movement.
But other state units — like those in poll-bound Rajasthan and Madhya Pradesh — are also firmly in the camp of ''no-changers'', causing a marked erosion in the finance ministry''s enthusiasm, since Jaswant Singh announced the Centre''s VAT intent as part of his maiden Budget.
A shift in the stance can be ruled out because the BJP, ever-sensitive to the concerns of traders, may be loath to antagonise them in view of the looming round of crucial electoral contests, and when it has Congress snapping at its heels to emerge as the champion of the constituency.
The political constraint is set to push back the April 1 deadline that the finance ministry has set for doing away with the ancient regime. At any rate, it doesn''t have the statutory wherewithal to force the recalcitrant states to fall in line.
The disparate nature of the anti-VAT coalition is a double-edged sword for the finance ministry. If the fact that the opposition cuts across party affiliations has complicated the finance ministry''s task, it can also buffer the government against accusations of backtracking.