Stating that the issue of inflation and the rise in fuel prices will dominate the Parliament session beginning July 19, senior Congress leader Mallikarjun Kharge on Monday alleged the Centre had collected Rs 25 lakh crore through fuel tax but it is neither using this fund for the welfare of people nor giving it to state governments.

Addressing a press conference here, the Leader of Opposition in the Rajya Sabha said the Narendra Modi government had made the lives of ordinary people “miserable” in the last seven years.

“Prices of fuel, LPG, edible oil are at an all-time high. The Centre has collected Rs 25 lakh crore as tax on fuel but it is not being used for people’s welfare or being given to state governments,” Kharge alleged.

He said the Modi government had raised prices of fuel “326 times including 38 times in the last two months”.

“The Central tax on fuel during the UPA rule was Rs 9.48 (per litre) which is now Rs 32.90 (per litre). During the tenure of the UPA, the rate of crude oil was Rs 111 per barrel and the petrol price was Rs 71 (per litre). Contrary to this, when the rate of crude oil is 44 USD per barrel the price of petrol is Rs 107 per litre now,” he said.

He said while the Union government has “collected Rs 25 lakh crore in the fuel tax” and the rate of LPG cylinder has reached Rs 834 the subsidy has also been withdrawn.

“The prime minister had said direct benefit transfer (DBT) would ensure savings of Rs 15,000 crore, which means the government has saved almost Rs one lakh crore this way. But the Modi government is not using this money for the welfare of people and also not providing it to state governments,” Kharge said.

He said Congress leader Rahul Gandhi had suggested that Rs 6,000 be transferred in bank accounts of the poor, but that idea was rubbished.

“During the UPA rule, 27.1 per cent people were lifted above the below poverty line whereas 23 crore people were below the poverty line (BPL) as of last year. Due to the wrong policies of the Modi government, the income of 97 per cent of families had reduced,” Kharge said.

He said 1.33 lakh people lost their jobs during the Covid-19 pandemic while the per capita income fell by Rs 10,000 and GDP dipped by 9 to10 per cent.

Kharge said Maharashtra is yet to receive Rs 32,000 crore in GST refund from the Centre.

The Congress is one of the ruling constituents in the Maha Vikas Aghadi government comprising the Shiv Sena and the NCP.

Retail inflation remains high at 6.26%

Retail inflation remained above the RBI’s comfort level for the second consecutive month despite slipping slightly to 6.26 per cent in June while the factory output recorded a growth of 29.3 per cent in May, mainly on account of the base effect, the government data showed.

The marginal slippage in the Consumer Price Index (CPI)-based inflation was noticed despite little firmness witnessed in the food inflation which inched up to 5.15 per cent in June from 5.01 per cent a month ago.

Retail inflation based on Consumer Price Index (CPI) was 6.3 per cent in May 2021 and 6.23 per cent in June 2020.

As regards the factory output, the Index of Industrial Production rose sharply by 29.3 per cent in May against a decline of 33.4 per cent in the corresponding month of 2020.

As per the data released by the National Statistical Office (NSO) on June CPI, the inflation on annual basis in the ‘oils and fats’ segment was 34.78 per cent in June.

The manufacturing sector -- which constitutes 77.63 per cent of the Index of Industrial Production (IIP) -- grew 34.5 per cent in May this year, as per the data released by the National Statistical Office (NSO) on Monday.

The mining sector output rose 23.3 per cent in May while power generation increased 7.5 per cent during the same month.

In May 2021, the IIP stood at 116.6 points compared to 90.2 point in the same month last year. The index was at 135.4 points in May 2019 as per the NSO data. The data showed that industrial production recovered but was still below the pre-pandemic level in May 2019.

Industrial production had plunged 18.7 per cent in March last year following the COVID-19 outbreak and remained in the negative zone till August 2020.

Commenting on the CPI data, Suresh Nagpal, Chairman of Central Organisation for Oil Industry and Trade (COOIT), an apex association of edible oil, said internationally, the prices of edible oil started correcting in the second fortnight of June.

“The Government of India has also reduced duty and has lifted restriction on imports of certain edible oils for the next few months. As a result, the prices of edible oils have softened in both wholesale and retail market since mid of June. We expect prices to remain at the current level over the next few months,” he said.

Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank, said the softer-than-expected CPI inflation comes as a relief after a shockingly high May reading.

While the headline inflation still remains elevated and risks remain, the high frequency mandi data shows further moderation in food prices in July signalling towards a return of sub-6 per cent readings going ahead, she said.

“We continue to expect the MPC to retain its current policy guidance in the August policy in favour of growth. However, towards the end of the year gradual policy normalization will be underway,” she added.