Nation

On fuel price cut, Nirmala Sitharaman’s before and after 2014 comparison

May 22, 2022
Sezarr

Nirmala Sitharaman was responding to criticism from opposition parties over fuel prices.

New Delhi:

As the Center and opposition parties take a call on the recent cut in central excise duty on fuel, with the latter accusing the government of “betraying” the people by “juggling data”, Finance Minister Nirmala Sitharaman today said in a statement. counterattacked with explanation. The Congress and some other opposition parties alleged that the Narendra Modi-led government had reduced the excise duty, which is shared by the states, thus actually reducing the prices of petrol, diesel and cooking gas. No major effort is being made. In a series of tweets, Ms Sitharaman explained that the excise component which is not shared by the state and the Centre, bears the entire cost. Pointing to the comparative figures of developmental expenditure and subsidies, he claimed that the PM Modi-led government has spent much more in the last 8 years than the Congress-led UPA, which was in power in 10 years.

“Basic Excise Duty (BED), Special Additional Excise Duty (SAED), Road and Infrastructure Cess (RIC) and Agriculture and Infrastructure Development Cess (AIDC) together make up the excise duty on petrol and diesel. Basic ED is shareable with states ..SAED, RIC and AIDC are non-shareable.

Excise duty reduction of Rs 8/litre on petrol and Rs 6/litre on diesel (effective from today) has been done entirely in Road and Infrastructure Cess (RIC),” she said in a tweet.

It said that in November 2021 the final excise duty cut of Rs 5 per liter in petrol and Rs 10 per liter in diesel was done completely at RIC.

“The original ED which is shareable with the states has not been touched.

Therefore, the entire burden of these two fee deductions (done in November 21 and yesterday) is borne by the Centre.”

Quoting Reserve Bank of India (RBI) data, the minister said the total development expenditure incurred by the PM Narendra Modi-led government during 2014-22 was Rs 90.9 lakh crore.

In contrast, only Rs 49.2 lakh crore was spent on developmental expenditure during 2004-2014.

Another “useful fact”, as he said, was that of the total expenditure by the PM Modi-led government so far, Rs 24.85 lakh crore has been spent on food, fuel and fertilizer subsidies and Rs 26.3 lakh crore on capital formation. Includes Rs.

“Only Rs 13.9 lakh crore was spent on subsidies in the 10 years of UPA,” he said.

He said the duty cut yesterday has implications of Rs 1,00,000 crore annually for the Centre. Duty cut in November 2021 means Rs 1,20,000 crore annually.

“The total revenue implication for the Centre, on these two fee cuts, is Rs 2,20,000 crore annually,” Ms Sitharaman said.

In a significant move aimed at providing relief to the people from high fuel prices, the Center on Saturday announced reduction of excise duty on petrol by Rs 8 per liter and on diesel by Rs 6 per liter.

“We are reducing the central excise duty on petrol by Rs 8 per liter and on diesel by Rs 6 per liter. This will reduce the price of petrol by Rs 9.5 per liter and diesel by Rs 7 per liter. This will generate revenue for the government. An implication of about Rs 1 lakh crore/year,” Ms Sitharaman had said.

She said, “I would like to appeal to all the state governments, especially those states, where cuts were not made during the last round (November 2021), to implement similar cuts and provide relief to the common man. for,” he said.

The Congress retaliated sharply, saying the cut was too low and accused the Center of “fooling” the people. “The country does not need data juggling to dupe people,” said a senior leader, pointing to the figures from 60 days ago and the rates of 2014.

Petroleum and Natural Gas Minister Hardeep Singh Puri raised the pitch on “refusal by some states to reduce prices”, echoing Ms Sitharaman’s call to states.

“I would like to highlight the fact that despite this second reduction in central excise duty, the price of petrol and diesel in states like Maharashtra, Rajasthan, West Bengal, Tamil Nadu, Andhra Pradesh, Jharkhand and Kerala is almost 10% as compared to BJP ruled states. -15 is more. States,” he had tweeted.

He said the price disparity is due to the refusal of their respective state governments to reduce VAT.

Congress general secretary Randeep Singh Surjewala responded to the announcement, which he called a “jumla”, and sought restoration of the May 2014 central excise duty of Rs 9.48 per liter on petrol and Rs 3.56 per liter on diesel.

Even the Biju Janata Dal (BJD), considered BJP-friendly, has rejected the Centre’s call for states to reduce state taxes (VAT). Odisha BJD MP Amar Patnaik said there was “limited scope” for revenue collection for states and that states “already have a narrow revenue-raising space” in the form of value-added taxes.

“The Center collects excise duty, additional excise duty and cess and surcharge on petrol and sickness whereas states collect only VAT. Hence, the Center has a lot of scope and scope to reduce the tax, duty and cess component on these products. The space is there and they have done so apparently to address the issue of rising inflation in the country, which was affecting the common man and the poor, who were under its influence for many months,” Mr Patnaik told news agency ANI. told.