Three weeks of fruitless debates over a tax reform bill which is hoped to spur growth in India’s fragile economy failed to be resolved in the country's monsoon parliament session on Thursday.
The Goods and Services Tax (GST) bill is intended to unify India's tax structure and make the transmission of products and services between states easier. Once implemented India’s economy is expected to see an expansion of two percent.
Prime Minister Narendra Modi failed to secure total backing for the bill from opposition Congress party members, making it difficult for it to pass through the courts as a two-third majority of votes was needed.
Finance Minister Arun Jaitley firmly asserted that the delay of the bill until December will make it "extremely difficult" to meet a self determined deadline of next April to launch the new sales tax.
Economists believe the delay in the passage of the GST bill will also have negative effects on other crucial bills such as labour and land legislation which play a vital role in the creation of jobs in the workforce.
Modi may use his powers to call a special sitting of parliament to pass the bill before the scheduled session.
"We are determined and will make all efforts to implement it from April," said Jaitley.
However, before this is possible India's government needs to reach an agreement with the Congress party which has demanded the resignation of three of Modi's cabinet members.