PM flags high fuel prices in Opposition-ruled states, their CMs hit back at Centre

The Prime Minister said that last November a request was made to reduce VAT but states like Maharashtra, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu, Kerala, Jharkhand did not do so “for some reason”. The remarks on the issue of fuel price, made during his meeting with Chief Ministers to review the Covid-19 situation, had the Opposition reacting angrily and accusing him of “playing politics”.

TMC leader and West Bengal Chief Minister Mamata Banerjee told reporters in Kolkata that the interaction with the Prime Minister was “completely one-sided and misleading“. Opposition states, she said, get “step-motherly” treatment.

“The facts shared by him were wrong. Our government provided Re 1 subsidy on petrol prices. We have lost Rs 1,500 crore because of this, but the Prime Minister didn’t say a word about this. Instead, he kept appreciating BJP-ruled states. The Centre owes West Bengal Rs 97,000 crore. I request the PM to pay us half of that amount and we will provide a much higher subsidy on petrol and diesel than BJP-ruled states,” she said.

Shiv Sena leader and Maharashtra Chief Minister Uddhav Thackeray issued a statement detailing the Centre and the state’s share of taxes on fuel. “The Union government owes Rs 26,500 crore to the Maharashtra government. Maharashtra’s contribution in direct taxes collection at the national level is 38.3 per cent and its share in the GST (collection) is 15 per cent, but the Centre gives us step-motherly treatment,” Thackeray said in the statement.

TRS leader and Telangana Chief Minister K Chandrasekhar Rao said Telangana had not hiked fuel prices since 2014 when the TRS assumed power and the Centre had no right to ask the state to reduce taxes. Minister K T Rama Rao blamed the Centre’s policies for the high fuel prices, and called for scrapping of the cess “imposed” by the Centre.

In Thiruvananthapuram, Kerala Finance Minister K N Balagopal said the increase in petrol and diesel rates was due to the cess and surcharge levied by the Centre. “We have not increased fuel taxes for the last six years. Then how can Kerala reduce taxes. It is the Union government that has adopted a stand against federalism,” he said.

Congress chief spokesperson Randeep Surjewala targeted Modi, demanding that he give an account of Rs 27 lakh crore “collected” by the government from tax on petrol and diesel.

During his meeting with the CMs, the Prime Minister mentioned conditions imposed by global events — it appeared to be a reference to Russia’s invasion of Ukraine and the fallout of the war — and said the “spirit of cooperative federalism” becomes all the more important.

“To strengthen India’s economy, there needs to be coordination between the Central and state governments in economic decisions. This is more necessary than ever. You all are aware of the situation of war which has arisen and the way the supply chain has been affected,” he said.

“Now let me give a small example. The issue of petrol and diesel prices is before all of us. In order to reduce the burden of rising petrol and diesel prices on countrymen, the Central government had reduced excise duty in November last year. The Central government had also urged states to reduce their taxes and transfer these benefits to the citizens,” he said.

He said (BJP-ruled) Karnataka and Gujarat had undertaken tax reduction for “the welfare of the people” despite revenue loss while their neighbouring states earned revenue by not reducing tax. “It is natural that the states which cut the tax, they lose revenue. For example, if Karnataka had not cut tax, it would have got excess revenue of Rs 5,000 crore in six months. Had Gujarat also not reduced tax, it would have got more revenue to the tune of Rs 3,500 crore. Some such states, for the betterment of their citizens, have reduced VAT so that their citizens do not suffer. They have taken a positive step.”

He then named Opposition-ruled Maharashtra, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu, Kerala, Jharkhand for not reducing tax on petrol. “For some reason, they did not accept this and continue to burden the citizens of their state… But now I request you to do it in the interest of the country,” he said.

Modi said 42 per cent of the revenue at the Centre goes to state governments. “I urge all states to work as a team in this time of global crisis following the spirit of cooperative federalism.”

He gave a break-up of fuel prices in BJP-ruled cities as against Opposition-ruled cities. “Today, in Chennai, petrol is around Rs 111. The price in Hyderabad is more than Rs 119, the price in Kolkata is more than Rs 115. The price in Mumbai is more than Rs 120. However, in Daman and Diu, next to Mumbai, the price is Rs 102… In Jaipur, it is Rs 118, but in Guwahati, it is Rs 105. In Gurugram, it is Rs 105. And in Dehradun, in our small state Uttarakhand, it is Rs 103,” he said.

— With ENS, PTI reports