India Elections: Congress Setback Improves Chance Of GST Bill Passing

In state elections this week, India’s Prime Minister Narendra Modi’s Bharatiya Janata Party is poised to score some important gains beyond its traditional strongholds into the south, east and northeast parts of India.

The election results come out Thursday, but exit polls show the BJP may be able to capture its first seats ever in Kerala in southern India. In Tamil Nadu and West Bengal, the regional parties will remain in power.

This week’s election is more a rude wakening call to the opposition Congress Party, wroteEurasia Group:

Although Congress and the BJP effectively agree on the GST’s substance, Gandhi has used its obstruction to protest other, unrelated issues. Most regional parties, including some of those set to return to power in their respective states this week, already back the GST. In the coming months Congress is set to lose a number of upper house seats to the BJP as some current members’ terms expire. While opposition parties will still collectively hold a majority, the BJP will enjoy greater ability to push through legislation with regional party support over Congress objections, inducing Gandhi to support GST passage now or risk being seen as weak and an obstruction to economic reform.

The GST Bill is one of the three landmark reform bills foreigners watch keenly to measure how much progress Modi is making in structural reforms.

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