Passage of GST bill likely in monsoon session: Citigroup

NEW DELHI: There is a strong possibility of GST bill passage during the ongoing monsoon session of Parliament given 'broad consensus' among political parties, says a Citigroup report.

According to the global financial services firm, since the political environment in the country remains "somewhat contentious", the government is likely to prioritise its legislative agenda and pursue less contentious bills.

"With the government aiming to implement Goods and Service Tax regime from April 2016, the passage of constitutional amendment bill will be the primary focus of the government," Citigroup India Economist Anurag Jha said in a research note.

In the budget session of Parliament, the constitutional amendment bill for GST was passed by the Lower house with a two-thirds majority and was subsequently sent to select committee of the Upper house.

The Rajya Sabha Select Committee yesterday adopted a report endorsing a majority of provisions of the GST Bill after the Centre agreed to compensate states for revenue loss for 5 years.

"Thus we see stronger likelihood of the passage of constitutional amendment bill (GST) given broad consensus across political parties," it added.

The report, however, noted that "with the ruling NDA coalition having only 65/245 seats in the Upper house, the passage of bill with a two-thirds majority would only be possible with support from opposition parties".

According to the global brokerage firm, reforms and rate easing are key for recovery and notwithstanding an "uneven pace" of recovery so far, the medium-term outlook continues to be "positive".

The medium term outlook for the country looks positive on the back of "structural reforms, cyclical easing of monetary policy and benign global commodity prices", the report added.

The government aims to roll out GST from April 1 next year.