Parliament sent a proposed bankruptcy law for review on Wednesday, closing off a raucous winter session without transacting any major legislative business including a signature reform on taxes – the GST Bill.
The bankruptcy law is aimed at unifying and overhauling rules governing the liquidation or revival of ailing companies into a single code and for the first time imposing deadlines.
Its passage was widely considered to be a done deal after the government introduced the legislation as a money bill which could not have been blocked in the opposition-dominated upper house.
But Finance Minister Arun Jaitley on Wednesday gave in to a demand by some opposition members for a review by a parliamentary panel. The panel has been asked to submit its suggestions in the first week of the session that begins in February.
Jayant Sinha, Jaitley’s deputy in the finance ministry, told reporters that while the government would have liked to pass the bill, it also wanted it to be foolproof.
The month-long session was also expected to make a breakthrough on the passage of the proposed goods and services tax (GST) Bill that has been languishing in Parliament since last December.
The measure is the biggest tax reform since Independence from Britain in 1947. It seeks to replace a slew of central and state levies, converting the nation of 1.2 billion people into a customs union.
Even Arun Jaitley’s offer to address some of the Congress party’s concerns on the bill failed to paper over the fraying ties between the two parties.
The failure to pass the GST in the session has ensured that Jaitley’s self-imposed deadline of April 1 for its launch will be missed.
“April 1 is out of question,” a senior finance ministry official said without spelling out a new timeline.
Sinha also shied away from setting a new date for the GST rollout, which he said was dependent on the passage of the bill.
With political parties gearing up for a fresh set of state elections next year, very few are hopeful of speedier reforms.
“Prospects for wide-ranging reform in the first half of 2016 look slim too,” wrote Shilan Shah, an economist with Capital Economics.