Modi reforms take a solid pounding

New Delhi: Prime Minister Narendra Modi’s push to crucial economic reforms like the Goods and Services Tax (GST) is likely to get tougher after loss in the Bihar elections. This even when industry leaders like Kiran Mazumdar Shaw have started asking government to focus on its economic agenda. Many analysts are also expecting BJP loss in Bihar to hit stock markets in short -term on worries of delay in economic reforms.

With opposition buoyant after win in Bihar assembly election, one of the biggest tax reform which the Modi government was pushing — the GST —is unlikely to be passed by the Parliament any time soon. It is also likely to miss its implementation date of April 1, 2016, said analysts.

A win in Bihar, would have given the BJP political authority to push its long-pending reform bills in the Parliament. An indication on this came when former finance minister and Congress leader P. Chidambaram said on Sunday that while the opposition of the BJP to GST was “unreasoned, blind and arbitrary”, that of the Congress is based on specific objection.

The other important reforms like  bankruptcy law, the real estate regulatory authority Bill and the labour reforms are also likely to face increased opposition in the Parliament. Barclays on Sunday said that BJP’s big setback in Bihar elections could be a “stumbling block” to the Central government’s reform agenda.

It said that the Bihar election verdict could also lead to “weakness” in the stock market. Indian financial markets were cautious ahead of the election results, and a result against the BJP should lead to market weakness, it added.

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