The Hindu : Front Page : Many States cut levies

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Friday, Jun 06, 2008
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Many States cut levies

Anita Joshua

Congress States act on Sonia plea

NEW DELHI: After West Bengal and Kerala, several States — most of them ruled by the Congress — on Thursday announced cuts in their levies on petroleum products to cushion the hike in fuel prices.

They are Maharashtra, Andhra Pradesh, Tamil Nadu, Delhi, Bihar and Assam. With the Congress and the Bharatiya Janata Party (BJP) asking their Chief Ministers to reduce State taxes and levies to ease the burden of the fuel hike, most of the other States are expected to fall in line in a couple of days.

Following Wednesday’s appeal by Prime Minister Manmohan Singh and a telephone call on Thursday from Congress president Sonia Gandhi to the Chief Ministers of States ruled by the party, the Congress-led administrations put in motion the process of tax reduction.

The other Congress-ruled States are expected to announce some relief in a day.

The BJP followed suit late in the evening with president Rajnath Singh asking all party Chief Ministers to cut State levies. Among the Congress-ruled States, the first to get off the mark in following the advisory from the high command was Delhi Chief Minister Sheila Dikshit.

With the foregoing of the Valued Added Tax (VAT) on LPG and provision of an additional subsidy, the price of LPG will go up by only Rs. 10 instead of Rs. 50 in the Capital. The Assam government has decided to reduce the price of petrol and diesel by Re. 1. Late in the evening, Andhra Pradesh Chief Minister Y.S. Rajasekhara Reddy announced in Guntur that the State would absorb the entire hike in the price of LPG and it would be available at the old price.

The Maharashtra Cabinet decided to cut Sales Tax (ST) on the fuel by two per cent and the VAT on LPG by 4 per cent. Haryana Chief Minister Bhupinder Singh Hooda has called a Cabinet meeting for Friday; his officials maintained that a reduction was on the cards.

With Jammu and Kashmir Chief Minister Ghulam Nabi Azad in the Capital, there was no word from the State on this issue. Outside the Congress stables, Tamil Nadu announced a two per cent cut in the tax on diesel and Bihar promulgated an ordinance to reduce ST on petrol by 2.5 per cent and on diesel by 1.64 per cent. Ms. Gandhi’s call to the Congress Chief Ministers was seen as an effort to stave off criticism that the party was abandoning the “common man.”

On Wednesday Prime Minister Manmohan Singh said the price hike was inevitable: “It is therefore incumbent upon State governments, many of which tax petroleum products substantially, to also contribute to this national effort by suitably reducing State taxes and levies.”

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