A R DAS / NEW DELHI
Union Finance Minister Nirmala Sitharaman today said the excise duty reduction of 8 rupees per litre on petrol and 6 rupees per litre on diesel has entirely been made in Road and Infrastructure Cess, RIC.
In a series of tweets, Ms Sitharaman said that even in November last year, the reduction of 5 rupees per litre in petrol and 10 rupees per litre in diesel was entirely made in RIC. Basic Excise Duty, Special Additional Excise duty, Road and Infrastructure Cess and Agriculture and Infrastructure Development Cess together constitute Excise Duty on petrol and diesel. She said Basic Excise Duty is sharable with states and Special Additional Excise duty, Road and Infrastructure Cess and Agriculture and Infrastructure Development Cess are non-sharable.
The Finance Minister stressed that Basic ED which is sharable with states has not been touched. She said that therefore, the entire burden of these two duty cuts made in November last year and yesterday is borne by the Centre. The duty reduction made yesterday has an implication of one lakh crore rupees a year for Centre. The duty reduction made in November last year has an implication of 1 lakh 20 thousand crore rupees a year for Centre. Total revenue implication to Centre, on these two duty cuts is 2 lakh 20 thousand crore rupees a year.
Ms Sitharaman said RBI data shows total developmental expenditure incurred by the Narendra Modi government during 2014 to 2022 was 90.9 lakh crore rupees. She added that in contrast, only 49.2 lakh crore rupees was spent on developmental expenditure during 2004 to 2014. The Minister asserted that the expenditure incurred by NDA government includes 24.85 lakh crore rupees spent so far on food, fuel and fertiliser subsidies and 26.3 lakh crore rupees on capital creation. She pointed out that over the 10 years of UPA, only 13.9 lakh crore rupees was spent on subsidies.
Even as petrol and diesel prices were slashed by Rs 8.69 a litre and diesel by Rs 7.05 per litre following the government cutting excise duty on auto fuels to give relief to consumers battered by high fuel prices that has also pushed inflation to record high, the Congress on Sunday said that the step was a political gimmick and not relief to people, as it was like ‘three steps forward and two steps back’.
While the Union government cut the excise duty, it also asked states to replicate the same intention by reducing the VAT and giving relief to the common man.
“I wish to exhort all state governments, especially the states where the reduction wasn’t done during the last round (November 2021), to also implement a similar cut and give relief to the common man,” Nirmala Sitharaman said while announcing a duty cut.
Post the price cut, former Finance Minister P Chidambaram likened the situation of states after the latest excise duty cut on petrol, and diesel between “the devil and the deep sea”.
Chidambaram wondered whether the states can afford to give up revenue from VAT on petrol and diesel unless the Centre devolves more funds or gives them more grants.
Amid the blame-game between the Centre and Opposition over the intention of reducing the fuel prices, Finance Minister Nirmala Sitharaman put some facts before the people saying criticism/appraisal can benefit from having them before us.
However, Congress spokesperson Gaurav Vallabh said that the BJP government was clueless about the economy and financial management.
The government on Saturday announced a record Rs 8 per litre cut in excise duty on petrol and Rs 6 per litre reduction on diesel.