By marking higher fuel prices in many opposition-ruled states, Prime Minister Narendra Modi on Wednesday called on them to reduce VAT in the “national interest” to benefit the common man and work in a spirit of cooperative federalism in this time of global crisis. Modi raised the issue that many states do not agree with the Center’s call to reduce VAT on petrol and diesel after his government lowered excise duties on them last November, calling it “injustice” to people living there. and also harmful to neighboring states.
The Prime Minister focused much of his concluding remarks on his meeting with Prime Ministers to review the COVID-19 situation on the issue of fuel prices, the rise of which has been a matter of public debate and a reason behind the rise in inflation.
It is necessary to strengthen cooperative federalism to strengthen the Indian economy in the global scenario affected by war, he said in an apparent reference to the Russian attack on Ukraine, calling for better center-state coordination in economic decisions.
The supply chain has been affected and the challenges have been increasing, he added. Modi said the center had reduced excise duties on gasoline and diesel in November to reduce the price burden for people.
It had also called for reducing the VAT imposed by states and transferring the benefits to people, he noted, adding that some states did and some did not. It was mostly the BJP-driven states that lowered VAT by various margins and took as their starting point the center. Most opposition-ruled states did not, while the government of the Aam Aadmi party in Delhi did so much later.
In his remarks, Modi cited the example of Karnataka and Gujarat, both controlled by the BJP, and said they have suffered a revenue loss of almost 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, Kerala – all ruled by different opposition parties – have not reduced VAT for some reason, and prices are higher than other states, he said.
“I do not criticize anyone, but I pray for the welfare of the people of your states … I urge you to reduce VAT now, even after a delay of six months for the benefit of the people,” he said. most of these states listen. In Chennai, Jaipur, Hyderabad, Kolkata and Mumbai, petrol prices (per liter) are above Rs 111, Rs 118, Rs 119, Rs 115 and Rs 120, he said, noting that they cost much lower to Rs 102 in the Union area. of Daman and Diu, 105 Rs in Lucknow, 106 Rs in Jammu, 105 Rs in Guwahati and 103 Rs in Dehradun.
When he noted that the center still shares 42 percent of its revenue with states, the prime minister said it is his “special request” to these prime ministers to reduce VAT. The opposition has often blamed the central government for high fuel prices, while the BJP has mentioned rising crude oil costs in the international market for this and also attacked states run by rival parties for not doing enough.