Updated: February 26, 2021 5:10:29 am
Addressing students at the Indian Institute of Management-Ahmedabad (IIM-A), Finance Minister Nirmala Sitharaman on Thursday said that it is for both the Centre and the states to sit and talk over the rising fuel prices.
Replying to a question on when the government is planning to reduce the cess or other taxes on fuel and if its stance to use the fuel cess to generate revenue will change, Sitharaman — during the JSW School of Public Policy Institute Lecture on ‘The Economic Rebound and the Indian Economy in 2021 and Beyond’ — stated: “It is not just the cess, you have an excise duty of the Centre, then you have a VAT of the states which are percentage driven. We can bicker about who earns more. You are right if you say that the Centre earns more but everything that the Centre earns, 40 per cent of it goes to the states.”
“So there is revenue both for the Centre and the states. That is why I strongly believe that it is no longer competitive. If the end consumer should pay less and the burden should be less on them and I concede it also from the point of view that more the fuel costs, more the inflation, but it is no longer competitive as Centre says you reduce first then the states will come on board, it may or may not be the case,” Sitharaman said, adding, “If eventually … the consumers ought to be bearing so much of the burden, it is both the Centre and the states that have to talk. I concede this is where the action has to be.”
However, she added she won’t be able to say when is the government planning to cut cesses on fuel.
“It’s a dharamsankat,” she said on a lighter note.
When asked about the farmers’ protest and their demand to provide a legal statute to the minimum support price (MSP) and the Centre’s apprehension to do so, Sitharaman said indeed MSP has to be a part of the statute and given a legal backing, but questioned why the same wasn’t felt in the ten-year rule of the UPA government and wondered “what is the issue actually here”.
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