There Is a Way to Cut Petrol, Diesel Prices But the Modi Government Isn't Interested

Prasenjit Bose thewire.in , Vartha Bharati | 12-09-2018 | 17:46:00 IST

An employee of Bharat Petroleum waits for customers in Mumbai. Credit: Danish Siddiqui/Reuters

The prices of petrol and diesel have reached unprecedented levels, leading to massive discontent and protests organised by the opposition. Petrol in Delhi has crossed Rs 80 per litre and diesel Rs 72 per litre. In most other cities, the prices have reached higher levels, depending on the rates of VAT imposed by state governments.

Spokespersons of the Narendra Modi government are pleading helplessness over the situation, citing the hardening of global crude oil prices and the devaluation of the rupee. This is a lame excuse. The current prices of petrol and diesel in India’s neighbouring countries Asia are much lower, as can be seen from Table 1.

Table1: Retail price of petrol and diesel (1 litre) in India and neighbouring countries (in Indian rupee) on September 1, 2018

Source: Petroleum Planning & Analysis Cell (PPAC), Ministry of Petroleum & Natural Gas

Why are the retail prices of petrol and diesel higher in India? It is because of the high incidence of Central excise and state VAT imposed on these commodities. For every litre of petrol, the Central government currently collects an excise duty of Rs 19.48; for diesel the excise duty is Rs 15.33 per litre. The state governments impose VAT over and above this. The rate of indirect taxes (central excise and VAT taken together) have crossed 100% in the case of petrol and 70% in the case of diesel. Without taxes, the retail price of a litre of petrol and diesel should have been around Rs. 40, even at the current level of international crude oil prices.

Table 2: Tax Revenues of the Union government

Source: Receipts Budget, 2018-19; CAG Report Nos. 42 of 2017, Department of Revenue (Indirect Taxes – Central Excise) & CAG Report No. 17 of 2013, Department of Revenue (Compliance Audit on Indirect Taxes-Central Excise and Service)

*Note: Data on excise duties on petro-products for 2017-18 is provisional and has been sourced from PPAC Ready Reckoner, June 2018, Ministry of Petroleum & Natural Gas    

Table 2 provides the annual estimates of gross tax revenues of the union government under the UPA-II and the Modi regime along with the break-up of major tax-heads, namely excise duties on petro-products, corporate tax and income tax. Table 3 provides the share of these three major tax heads in gross tax revenue, calculated from Table 2.

It can be seen clearly from Table 3 that the reliance of the Union government on excise collections from petro-products have gone up considerably under the NDA. In the five years from 2009-10 to 2013-14, the share of excise collections from petro-products in gross tax revenues (GTR) averaged around 8.8%. From 2014-15 to 2017-18, the average went up to 12.5%. Simultaneously, the share of corporate tax collections in GTR fell from an average of 36.5% under UPA-II to 30.7%. The average share of income tax collections in GTR have increased from 19% under UPA-II to 21%.

Table 3: Share of Major Taxes in Gross Tax Revenues (GTR) of the Union government

Source: Same as Table 2

This exposes the class bias in the NDA’s revenue mobilisation strategy. While the tax share of large corporations have come down substantially, the tax share of fuel consumers and income tax payers has risen. The corporate class has benefitted at the cost of the poor and the middle class. This socially iniquitous and unjust revenue mobilisation strategy needs to be abandoned forthwith.

Petrol and diesel need to be brought under GST, just like kerosene and LPG. Even if the highest GST rate of 28% is applied, petrol and diesel would not cost more than Rs 55 per litre. The resulting revenue losses can be compensated through higher mobilisation of corporate taxes and doing away with corporate tax exemptions. Revenue foregone on account of corporate tax incentives have totalled over Rs 85,000 crore per year in the last two financial years, as per the receipts budget 2018-19. The pro-corporate bias in the revenue mobilisation strategy needs to be corrected.

Prasenjit Bose is an economist and political activist.

Courtesy: thewire.in

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Trouble ‘Miyas’ everywhere only then they will leave Assam: Himanta Biswa Sarma

Says “Himanta Biswa Sarma, BJP are openly against them, we are saying it openly

28-01-2026 ¦ 28-01-2026 IST

Assam Chief Minister Himanta Biswa Sarma | PTI

New Delhi: Assam Chief Minister Himanta Biswa Sarma on Tuesday said that four to five lakh “Miya voters” would be removed from the electoral rolls in the state once the Special Intensive Revision (SIR) of voter lists is carried out. He also made a series of controversial remarks openly targeting the Miya community, a term commonly used in Assam in a derogatory sense to refer to Bengali-speaking Muslims.

Speaking to reporters on the sidelines of an official programme in Digboi in Tinsukia district, Sarma said it was his responsibility to create difficulties for the Miya community and claimed that both he and the BJP were “directly against Miyas”.

“Four to five lakh Miya votes will have to be deleted in Assam when the SIR happens,” Sarma said, adding that such voters “should ideally not be allowed to vote in Assam, but in Bangladesh”. He asserted that the government was ensuring that they would not be able to vote in the state.

The chief minister was responding to questions about notices issued to thousands of Bengali-speaking Muslims during the claims and objections phase of the ongoing Special Revision (SR) of electoral rolls in Assam. While the Election Commission is conducting SIR exercises in 12 states and Union Territories, Assam is currently undergoing an SR, which is usually meant for routine updates.

Calling the current SR “preliminary”, Sarma said that a full-fledged SIR in Assam would lead to large-scale deletion of Miya voters. He said he was unconcerned about criticism from opposition parties over the issue.

“Let the Congress abuse me as much as they want. My job is to make the Miya people suffer,” Sarma said. He claimed that complaints filed against members of the community were done on his instructions and that he had encouraged BJP workers to keep filing complaints.

“I have told people wherever possible they should fill Form 7 so that they have to run around a little and are troubled,” he said, adding that such actions were meant to send a message that “the Assamese people are still living”.

In remarks that drew further outrage, Sarma urged people to trouble members of the Miya community in everyday life, claiming that “only if they face troubles will they leave Assam”. He also accused the media of sympathising with the community and warned journalists against such coverage.

“So you all should also trouble, and you should not do news that sympathise with them. There will be love jihad in your own house.” He said.

The comments triggered reactions from opposition leaders. Raijor Dal president and MLA Akhil Gogoi said the people of Assam had not elected Sarma to keep one community under constant pressure. Congress leader Aman Wadud accused the chief minister of rendering the Constitution meaningless in the state, saying his remarks showed a complete disregard for constitutional values.

According to the draft electoral rolls published on December 27, Assam currently has 2.51 crore voters. Election officials said 4.78 lakh names were marked as deceased, 5.23 lakh as having shifted, and 53,619 duplicate entries were removed during the revision process. Authorities also claimed that verification had been completed for over 61 lakh households.

On January 25, six opposition parties the Congress, Raijor Dal, Assam Jatiya Parishad, CPI, CPI(M) and CPI(M-L) submitted a memorandum to the state’s chief electoral officer. They alleged widespread legal violations, political interference and selective targeting of genuine voters during the SR exercise, describing it as arbitrary, unlawful and unconstitutional.