Advertisement
Modi raised the issue of many states not adhering to the Centre’s call for reducing the Value Added Tax (VAT) on petrol and diesel after his government slashed excise duties on them in November last, and called it ”injustice” to people living there and also harmful for neighboring states.
The prime minister focussed a big part of his concluding remarks in his meeting with chief ministers to review the COVID-19 situation on the issue of fuel price, whose rise has been a matter of public debate and a cause behind the surge in inflation.
Boosting cooperative federalism is necessary for strengthening the Indian economy in the global scenario impacted by war, he said, in an apparent reference to the Russian attack on Ukraine, and called for better Centre-states coordination in economic decisions. The supply chain has been impacted and challenges have been rising, he added. Modi said the Centre had reduced excise duties on petrol and diesel in November to reduce its price burden on people. It had also urged to reduce VAT, which is imposed by states, and transfer the benefits to people, he noted, adding some states did and some did not.
Related Articles
Advertisement
In his remarks, Modi cited the example of Karnataka and Gujarat, both ruled by the BJP, saying they have suffered a revenue loss of nearly Rs 5,000 crore and Rs 3,500-4,000 crore respectively by reducing VAT but they did so to help people. Their neighboring states did not, he added.
States like Maharashtra, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu, and Kerala- all ruled by different opposition parties- have not reduced VAT for some reasons, and prices there are higher than in other states, he said.
”I am not criticizing anyone but am praying to you for the welfare of people of your states…I urge you to reduce VAT now even after a delay of six months to benefit people,” he said, with chief ministers of most of these states listening.
In Chennai, Jaipur, Hyderabad, Kolkata, and Mumbai, petrol prices (per liter) are over Rs 111, Rs 118, Rs 119, Rs 115, and Rs 120, he said, noting that they cost much lower at Rs 102 in the union territory of Daman and Diu, Rs 105 in Lucknow, Rs 106 in Jammu, Rs 105 in Guwahati and Rs 103 in Dehradun.
Noting that the Centre anyway shares 42 percent of its revenue with states, the prime minister said it is his ”special request” to these chief ministers to reduce VAT.
The opposition has often blamed the central government for high fuel prices, while the BJP has cited rising crude costs in the international market for this and also attacked the states run by rival parties for not doing enough.