Sunday, May 22, 2022

Can't be grateful.

"The Centre on Saturday slashed excise duty by Rs 8 on petrol and Rs 6 on diesel to bring down fuel prices and ease inflation by reducing transportation charges for the Aam-Aadmi's (common man's) daily staples," TOI. "The government also announced a Rs 200 subsidy on LPG for consumers who were given connections free of cost under the Ujjwala programme, one of Narendra Modi government's flagship social welfare schemes launched in 2016." "Price of domestic gas, LPG has doubled to Rs 819 in the last seven years while increase in taxes on petrol and diesel has swelled collections by over 459 percent, Oil Minister Dharmendra Pradhan said" on 9 March 2021 in parliament, BS. In March 2014, when this government took over, the same amount of gas cost just Rs 410.5. The price of domestic gas jumped to Rs 1,003 a few days back, NDTV. The poor were already finding it difficult to refill their gas cylinders and some were returning to using wood or dried cow dung for cooking, ET. "A day after announcing a hefty fuel tax cut, Union Finance minister Nirmala Sitharaman on Sunday said the two rounds of duty reductions - the last one being in November - will cost the exchequer Rs 2.2 lakh crore (Rs 2.2 trillion) annually and the states' share of from the tax pool will not be affected as the Centre had opted to cut cess on petrol and diesel, which are outside the divisible pool," TOI. Is this a sacrifice? In December 2021, Sitharaman said that the government earned nearly Rs 8.02 trillion from taxes on fuel in the last 3 financial years and, of that, Rs 3.7 trillion came in 2020-21, ET. In 202-21, the share of cess and surcharges, which are not shared with states, amounted to 19.9% of the central government's revenue, BS. Do politicians have the right to increase taxes on citizens at their whim and deprive state governments of their share through sleight of hand? Are we supposed to be grateful for a little relief? The average price of petrol in the US is around $4 a gallon, eia.gov, which converts to around Rs 82 per liter at an exchange rate of Rs 77.5 per dollar, ET. The price of petrol in India varies from Rs 96.72 per liter in Delhi to Rs 111.35 in Mumbai, ET. "Tamil Nadu Finance Minister Palanivel Thiaga Rajan said the central government had never consulted states when it increased taxes and that his state was already incurring loss of over Rs 1,000 crore (Rs 10 billion) due to earlier tax cut announced by the government," TOI. "Therefore, it is neither fair nor reasonable to expect states to reduce their taxes," he said. Congress leader P Chidambaram said that states get very little from duties on petrol and diesel and their revenue comes from VAT which they cannot cut unless the central government shares more funds, ET. Seems that people are not grateful for a slight reduction in unfair forceful extraction of taxes. No surprise.

No comments: