The Hindu : Front Page : Congress in damage control mode

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Sunday, Jun 26, 2011
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Congress in damage control mode

Smita Gupta

NEW DELHI: In a bid to counter the negative impact of the hike in the prices of diesel, LPG and kerosene, and the attack from the Left parties and the Bharatiya Janata Party (BJP) on the issue, the Congress has asked its Chief Ministers to slash State taxes on these petroleum products to mitigate the strain on the ‘aam aadmi.'

Interestingly, in West Bengal, where the Congress is the junior partner, Chief Minister Mamata Banerjee decided on Saturday morning to withdraw a cess of Rs.16 a LPG cylinder in the State — the notification will come on Monday. She had earlier said she was pained by the Centre's move and had asked it to reduce the price of LPG to help the common man.

Meanwhile, lauding the Centre's decision to reduce customs and excise duty on petroleum products as a step to “give relief” to the common man, party general secretary Janardan Dwivedi said the States ruled by the Congress would be asked to follow suit.

“Just as the Centre has done away with customs duty, the State governments, too, can give some tax relief according to their financial capacity,” Mr. Dwivedi said.

A day after Petroleum Minister S. Jaipal Reddy, while announcing the hike, had said the government was compelled to bite the bullet, Mr. Dwivedi too spoke of the compelling circumstances that had forced the government to take this painful decision. “There are times,” Mr. Dwivedi said, “when you are compelled to take hard decisions. There is no doubt that when the prices of diesel go up, everybody feels the pinch. But if you see all the facts, you will realise that the government had no other option.”

He also pointed out that this has happened not only in the United Progressive Alliance government's tenure, recalling the many occasions on which the BJP-led National Democratic Alliance government had hiked the prices of petroleum products during its tenure. He also cited the examples of other countries in the region — Pakistan, Sri Lanka, Nepal and Bangladesh — where the prices of diesel, LPG and kerosene are much higher than in India.

Mr. Dwivedi stressed that 84 per cent of the country's oil requirement is imported and added that the government's decision to reduce excise and custom taxes will still result in a revenue loss of Rs. 49,000 crore to the exchequer.

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