Tax burden on petrol has become a people vs govt issue: Chidambaram

Team Udayavani, May 1, 2018, 3:08 PM IST

New Delhi: Senior Congress leader P Chidambaram today attacked the government over high petrol and diesel prices saying the “tax burden” on petroleum products has become an issue of “people versus the government”.

In a series of tweets, the former finance minister also countered the Modi governments claim that it has electrified all villages in the country, saying 94 per cent of them had been electrified by October 2013, long before Narendra Modi became the prime minister.

Raising the issue of hike in petrol and diesel prices, he said it increases the burden on the people. “Every rupee cut in tax on petrol/diesel will result in LOSS of Rs 13,000 crore says government. Every rupee tax on petrol/diesel will result in BURDEN of Rs 13,000 crore say the people (sic).”

“Whose interest should prevail? The interest of the government or the welfare of the people? Crushing tax burden on petrol and diesel has made this into a People vs Government issue,” he said on Twitter. State oil firms have not revised petrol and diesel price for almost a week now. This after petrol price hit a 55-month high of Rs 74.63 a litre and diesel rates climbed to a record high of Rs 65.93.

Every rupee cut in excise duty on petrol and diesel will result in a revenue loss of Rs 13,000 crore, government officials said. The central government levies Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. State sales tax or VAT vary from state to state. In Delhi, VAT on petrol is Rs 15.84 and Rs 9.68 a litre on diesel.

Petrol in the national capital costs Rs 74.63 per litre, the highest since September 14, 2013, when rates had hit Rs 76.06. Diesel price at Rs 65.93 is the highest ever. India has the highest retail prices of petrol and diesel among South Asian nations as taxes account for half of the pump rates.

The government had raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 per litre.

Subsequent to that excise duty reduction, the Centre had asked states to also lower VAT, but just four of them – Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh – reduced rates while others including BJP-ruled ones ignored the call.

In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped governments excise mop up more than double to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15, officials said.

Referring to the governments claim that it has electrified all villages in the country last week, Chidambaram asked who had electrified the 5,79,012 villages before Modi became the prime minister.

“After connecting 18,452 villages, PM claims that all 5,97,464 villages have been electrified. Good. But will PM please tell us who electrified the 5,79,012 villages before Mr Modi became PM?,” he tweeted. The former finance and home minister said 5,61,613 villages (94%) had been electrified by October 2013, long before Modi became the Prime Minister.

“Mother bakes a cake. A guest puts icing on the cake. Guest claims that she baked a lovely cake! PM is fond of saying nothing was done in the past 65 years. If nothing was done, how did 5,79,012 villages get electricity before Mr Modi became PM?,” he asked.