The Union government was cutting down on fuel prices just before the Assembly elections in a few States only to hike them several times after they were over, whereas the Tamil Nadu government reduced the State tax on petrol as promised, Chief Minister M.K. Stalin said in the Legislative Assembly on Thursday.
Responding to queries raised by Congress floor leader K. Selvaperunthagai (Sriperumbudur) in the House over a virtual meeting chaired by Prime Minister Narendra Modi and attended by various Chief Ministers [where the issue of tax on petrol was flagged], Mr. Stalin elaborated on how the Union government reduced the excise duty and increased the cess and the surcharge on fuel, affecting the people as well as the States.
“Since it [BJP] came power in 2014, whenever crude oil prices fell, instead of cutting down petrol and diesel prices accordingly, the Union government kept the surplus to itself it had generated due to the fall in crude oil prices,” Mr. Stalin contended.
Since the excise duty on petrol and diesel was to be shared with the States, the Union government reduced it and affected the revenue to be shared with the States, he argued. As the cess and surcharge need not be shared with the States, the Union government “hiked them sharply and added to the burden on the people” and kept several crores of rupees revenue it generated through them.
“Only because elections were scheduled in a few States, the Union government gave the impression that it was reducing the petrol and diesel prices,” Mr. Stalin charged. He alleged the Union government, a week after the elections were completed in those States, hiked the [fuel] prices surpassing the previous level and added to the burden of the people.
“But, after winning the [2021] Assembly election, the Tamil Nadu government cut down on the State taxes on petrol [by ₹3 per litre], despite the financial burden, even before the Union government did,” Mr. Stalin said. People were aware of all these. “I leave it to the people to decide on who is truly interested in cutting down fuel prices and who is pretending to cut down the prices only to blame others.”
State Finance Minister Palanivel Thiaga Rajan elaborated on how the actions of the Union government had affected the States since 2014 and contended that the tax on petrol and diesel was “naturally regressive”, which had “negative consequences on the common man.”
Since the fuel prices were directly linked to input costs for farmers , fishermen and truck drivers, Mr. Rajan contended that it “would lead to inflation.” Tamil Nadu was being unfairly treated by the Union government as well as the Finance Commissions over the years, Mr. Rajan said and asked: “Is this cooperative federalism?”
‘CM will take a call’
Later speaking to reporters, Mr. Palanivel Thiaga Rajan said that even after the tax cut by the BJP-ruled States, Madhya Pradesh had the highest level of tax for petrol and diesel, while in Uttar Pradesh, it was 26.8%. Without a cut after the Centre’s move, Tamil Nadu’s tax rate was 27%-28% he pointed out. Asked about the DMK’s poll promise of cutting the tax on petrol by ₹5 a litre, he pointed out that the government had already cut it by ₹3 last year, and with the cut by Centre, it was now effectively ₹3.80 a litre (because the ad valorem component had come down). “We will see what is the best way to do it and the Chief Minister will take a call.”
