Punjab raises VAT on petrol and diesel, withdraws power subsidy, increases bus fare in bid to shore up finances
Finance Minister Harpal Cheema announced the decisions after a Cabinet meeting called by Chief Minister Bhagwant Mann to address the state's current financial challenges
By hiking VAT on every unit of diesel and petrol, the government plans to make Rs 500 crore every year. (File) The fund-crunched Punjab government on Thursday approved an increase in value-added tax (VAT) of petrol and diesel prices by 61 paise and 92 paise per litre, respectively. It also announced the withdrawal of the Rs 3 per unit power subsidy given to consumers with loads up to 7 KW. In another major decision, it raised the bus fare by 23 paise per km.
Finance Minister Harpal Cheema announced the decisions after a Cabinet meeting in Chandigarh. Chief Minister Bhagwant Mann convened the Cabinet meeting to address the state’s current financial challenges as it was unable to pay government employees’ salaries until September 4.
The Aam Aadmi Party (AAP) government looks at saving Rs 1,500 crore per year by withdrawing the power subsidy introduced by the previous Congress government under Charanjit Singh Channi. The state is reeling under a financial crisis due to a fat power subsidy bill that is set to cross Rs 24,000 crore this year.
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