By Sagarneel Sinha
Petrol sells at Rs 100 at many places across the country. In those places where the price hasn’t yet crossed Rs 100, petrol sells near to it. Prices of diesel too are high. It now sells near to Rs 90 — in cities like Mumbai, it sells near to Rs 100. If this isn’t enough domestic LPG cylinders prices have been rising.
Despite the record-high levels of fuel prices across the country, Narendra Modi-led BJP government doesn’t seem to be worried. PM Modi blamed the previous governments for their failure to reduce the country’s large dependency on the import of petroleum products. Finance minister Nirmala Sitharaman blamed the oil bonds issued by the previous UPA government.
The previous UPA government issued oil bonds of around Rs 1.34 lakh crore — and the present government is talking about the burden of these. There has been, however, a rise in tax collections as a result of increased excise duty on petrol and diesel by the present dispensation. According to reports, the collections on petrol and diesel tax rose to 3.35 lakh in the fiscal year 2020-21. In the fiscal year 2019-20, the tax collections were 1.78 lakh crore.
The government’s data on tax collections from petrol and diesel prices contrast its arguments that UPA-era oil bonds are fully responsible for the record-high fuel prices in the country. In fact, the government raised excise duty on petrol from Rs 19.98 per litre to Rs 32.9 last year. The same on diesel was raised from Rs 15.83 to Rs 31.8. Obviously, the covid pandemic is also responsible for this as the government needs money to run the various welfare schemes, which undoubtedly have been successful under the Modi government to reach out to the needy living even in remote areas of the country.
Also, the blame laid by the current government for the fuel hike on the rise of international crude oil prices doesn’t say the full truth. In the past too, when the international crude oil prices came down, the benefit wasn’t passed to the common people as the government kept on increasing the excise duty on petrol and diesel to fill its coffers to fund welfare schemes and also for infrastructure projects. Last year during the pandemic, the international crude oil prices hit a record low but here in India the common people had to bear the brunt of the rise of excise duties on petrol and diesel.
In the latest India Today survey of Mood of the Nation, the price rise was termed as the biggest failure of the Modi government. This should alarm bells for the BJP. True that the Modi government’s successful welfare schemes — Ayushman Bharat, Ujjwala Yojana, Jan Aushadhi scheme, Kisan Samman Nidhi, etc — have been reaching out to the needy section but high fuel prices are also resulting in the increase of the prices of other daily required items. The rise in fuel prices runs the risk of negating the benefits of the welfare schemes — and this should worry the Modi government.
The state governments too can’t just pass all the blame to the Centre. The state governments too charge considerable VAT on fuel prices. According to a July report of Times of India, BJP-ruled Madhya Pradesh levies Rs 31.55 a litre VAT on petrol, the highest VAT by any state, while Congress-ruled Rajasthan charges Rs 21.82 a litre on diesel, the highest VAT on diesel. The same report states that Rajasthan levies Rs 29.88 a litre on petrol — even after a cut of 2% VAT early this year — while Shiv Sena-NCP-Congress coalition-ruled Maharashtra charges around Rs 29.55. The state governments, just like the Centre, defend their excise duties as requirements for the welfare schemes run by them and for development projects.
Although some states like Trinamool-ruled West Bengal, of course before the state elections, cut the petrol and diesel prices by just Re 1! On the other hand, BJP-ruled Assam, definitely before the state elections, reduced the prices of petrol and diesel by Rs 5. However, the DMK government of Tamil Nadu reduced Rs 3 on petrol after winning the elections.
Back when the fuel prices rose under Manmohan Singh-led UPA government, it faced heavy criticism from the then main opposition party BJP and also from the Left parties. Despite being ideologically opposed to each other, both the BJP and Left came together at the parliament — and also called all India strikes several times — to corner the Congress government over the issue of high fuel prices, which was attributed to the high price rise of other important commodities needed for daily life.
At the national capital, even senior leaders of BJP and Left held protests together against the Congress government. In the parliament, both Arun Jaitley, the then leader of opposition in the Rajya Sabha, and Sushma Swaraj, the then leader of opposition in the Lok Sabha, played key roles in uniting the opposition on the issue of price rise. Particularly, Sushma, who even brought out the list of her home budget affected by price rise on the floor of the house, used to deliver strong appealing speeches that resonated very well with the common people making even very difficult for the Congress leaders and their ministers to counter her arguments. Not to forget that price rise was one of the major reasons for the disastrous defeat of Congress in the 2014 Lok Sabha polls.
Agree that opposition leaders are issuing statements on social media against price rise and sometimes even holding some protests at the ground level. But the opposition, including Congress, hasn’t been yet able to focus on price rise properly. They seem to be more interested in the Pegasus issue — the major issue of the opposition during the last parliament session. Even if some political commentators keep pressing on Pegasus as the “most important one”, it is less likely to be a big issue for the public.
Not to forget that Congress presently is busy tackling internal fights within its state units from Kerala to Punjab and from Rajasthan to Chhattisgarh. On the other hand, the Left, which always tried to bring out the issue of price rise during the Congress rule at the national level, too has weakened considerably — and now no longer influences national politics as it used to do earlier.
This shouldn’t be a consolation for the BJP and the Modi government. Blaming the Congress governments won’t solve the problem of price rise and the saffron party wasn’t elected to power twice to only point out the mistakes of the grand old party. Common people are eagerly awaiting relief from the price rise. Instead of only passing the buck of reducing excise duties on petrol and diesel towards the states, the Modi government should reduce the excise duties charged by it and also reduce the domestic LPG gas cylinder prices to curb the price rise. (IPA Service)