Petrol, prices & politics: Opposition asks Centre to slash excise to 2014 levels
As the steady, steep upward climb of petroleum product prices continues, the Centre and states start a blame game, accuse the other for the plight of the common man caught in the whirlpool of inflationary pressures that are taking essentials away from the poor.
Lakshmana Venkat Kuchi, Senior Journalist
As the helpless common man, and the common woman pay through their nose for every drop of petrol and diesel they buy, the Centre and the state governments play the parcel with the misery of the masses.
The Centre asks the states to cut taxes to lessen the burden on the common man and the states in turn remind the Centre that it was its doing that the prices at the retail level are skyrocketing.
Well, the Prime Minister Narendra Modi’s kicked the ball with his exhortations to opposition ruled states – Tamil Nadu, Kerala, Andhra Pradesh, Telangana, Maharashtra, West Bengal, and Telangana – only to draw expected, sharp pungent and forceful tongue-lashing from the Chief Ministers of these states, already under a severe financial stress.
Political analysts see the game of narrative building at the Centre of this slanging match – with Prime Minister blaming the states of unwillingness to cut excise to give relief to the people and the states asking the Centre do cut central taxes and cess instead.
With people already feeling the pinch and speaking out, during the non-election time, slowly but surely questions are being asked.
Hovering over Rs 100 per litre – the prices of both petrol and diesel – have begun burning a bigger hole in the common man’s pockets and are having a cascading effect on the prices of all other commodities – just like what any student of high school economics would have told you.
If one were to listen to Prime Minister Modi, it would seem as if the Chief Ministers of opposition ruled states were all heartless and cruel, profit-hungry leaders who put a huge burden on the people. Addressing the CMs, Modi cited the recent and ongoing Ukraine war and said that the situation warranted coordinated action of the central and the state governments on economic matters and said petroleum product prices was one such area where centre and states in the true spirit of cooperative federalism.
Naming the opposition ruled states for not reducing VAT as suggested by him, the Prime Minister went onto give a break-up of the fuel prices in different states to reinforce his point that the retail prices were lower in BJP ruled state, perhaps in a bit to build narrative on the petroleum prices as well.
“Today, in Chennai, petrol is around Rs 111. The price in Hyderabad is more than Rs 119, the price in Kolkata is more than Rs 115. The price in Mumbai is more than Rs 120. However, in Daman and Diu, next to Mumbai, the price is Rs 102… In Jaipur, it is Rs 118, but in Guwahati, it is Rs 105. In Gurugram, it is Rs 105. And in Dehradun, in our small state Uttarakhand, it is Rs 103,” Modi said to reinforce his narrative that the opposition was unwilling, for whatever reason, to give relief to the common man on the petroleum prices.
Fresh from the electoral victory in four of the five state assembly polls the BJP contested, the Prime Minister sounded aggressive on petroleum prices issue.
Was he convincing enough with his narrative, especially when there seems no respite for the common man from the slow, sure and steady rise in petroleum product prices – since deregulated?
On this, there is muted anger among the people, but ironically even this seems directed at the opposition that they see failing the people, for not taking up the issue as forcefully as they should.
That is a perception, which the opposition will have to battle it out, but politically it lost no. time in countering the Prime Minister forcefully. First off the blocks was, as always, West Bengal Chief Minister Mamata Banerjee who reminded the PM of the huge monies owed to the states in terms of its share in central taxes and GST collections.
The Prime Minister’s “politics on petrol”, Mamata said was unleashed at the interaction on Covid-19, during the course of which the facts presented were “completely one-sided and misleading.”
Responding to the PM, Mamata Banerjee issued a powerful statement saying, “The facts shared by him were wrong. Our government provided Re 1 subsidy on petrol prices. We have lost Rs 1,500 crore because of this, but the Prime Minister didn’t say a word about this. Instead, he kept appreciating BJP-ruled states. The Centre owes West Bengal Rs 97,000 crore. I request the PM to pay us half of that amount and we will provide a much higher subsidy on petrol and diesel than BJP-ruled states.
Similar was the response of Maharashtra Chief Minister and Shiv Sena leader Udhav Thackeray who blamed the Centre for giving step-motherly treatment to the state.
“The Union government owes Rs 26,500 crore to the Maharashtra government. Maharashtra’s contribution in direct taxes collection at the national level is 38.3 per cent and its share in the GST (collection) is 15 per cent, but the Centre gives us step-motherly treatment,” Thackeray said.
Telangana too reacted sharply to the PM’s exhortations and its Chief Minister K Chandrashekhara Rao said that the state had never raised prices of fuel since 2014. “The Centre had no right to ask the state to reduce taxes. In fact, it is the Centre’s policies that are responsible for the high fuel prices said Telangana minister KT Rama Rao, who called for the immediate scrapping of the cess imposed by the Centre on petroleum products.
Kerala too took an exactly same stance saying it had not hiked taxes on petroleum products and that the Centre must stop collecting cess.
In a stinging retort, Tamil Nadu Chief Minister MK Stalin, said the central government had mopped up Rs 26 lakh crores in revenues on petroleum products and must give an account for the money collected and spent. Stalin, who has had recently flexed his political muscle outside Tamil Nadu in a show of strength at Delhi, accused the Centre of devouring Rs 26 lakh crore from fuel prices and yet they blame the states. The Centre did not give relief to the common man or give the states their rightful share in tax revenues, he alleged.
The Centre had cut taxes but increased cess, which need not be shared with the states, the DMK chief said.
The BJP formed a government in 2014, when international price of crude oil was very low. The central government since then had never provided any relief on passed on the benefit to the common man and continued to collect higher taxes and sat silent when prices kept rising.
“A week after the recent state elections, the prices were hiked and the union government imposed further burden on people,” Stalin said.
In fact, Tamil Nadu finance minister said the Centre should go back to 2014 rates by removing levy of cesses and surcharges. “The DMK government had been repeatedly urging the union government to reduce cesses and surcharges being levied and merge them with basic tax rates so that the states get their rightful share from the proceeds of the union taxes,” the TN Finance Minister P Thiagarajan said.
“Given that the Union Government’s taxes continue to be exorbitant, it is neither fair nor feasible for the State Government to further reduce taxes,” Thiagarajan said responding to the PM’s suggestion.
“We reiterate that the sole, simple, and fair approach to improve the situation for all, is for the Union Government to remove the levy of cesses and surcharges and revert to rates that prevailed in 2014,” Thiagarajan said adding “the union government would heed to reasonable request in the true spirit of cooperative federalism.”
(Lakshmana Venkat Kuchi is a senior journalist tracking social, economic, and political issues and takes a keen interest in sports as well. He has worked with Press Trust of India, The Hindu, Sunday Observer, and Hindustan Times.)