Bhubaneswar, Sept. 23: The Odisha government’s revenue has swelled up by Rs 600 crore in the past two years because of the frequent hikes in fuel prices.
While it was Rs 1,300 crore during 2010, it went up to Rs 1,980 crore in 2011-2012. “It is expected to touch Rs 2,200 crore by the end of the current financial year,” said an official.
Even though the Centre raised the price of diesel by Rs 5 per litre a few days ago, it has become costlier by another 96 paise in the state because of imposition of the 18 per cent VAT (value added tax) and 1 per cent entry tax.
With diesel being sold in the state at Rs 49.73, the state government is getting nearly Rs 9.50 per litre. It gains Rs 13.15 from every litre of petrol sold in the state.
The government, however, seems unwilling to follow the example of Bihar chief minister Nitish Kumar, who has dropped diesel prices by 85 paise in his state. His decision may act as a setback for the UPA government as many other state governments are expected to follow his path to put pressure on the Centre.
However, the Odisha government is yet to make a similar move despite pressure from organisations such as the All Odisha Private Bus Owners’ Association, which has urged the government to waive tax on diesel.
“The government should provide diesel to bus operators at a subsidised rate. If the government does not slash taxes, it will not be possible for us to ply the buses,” said the association’s president Debendra Sahoo.
The Odisha Petroleum Dealers’ Association, too, has demanded reduction of taxes. However, state government officials maintained that it would not be possible to slash taxes.
“Our revenue income from the mining has gone down compared to last year. If we also reduce tax on fuels, it will certainly hit our revenue base,” said an official of the finance department.
Following a hike in the prices of petroleum products in 2010, the state government had reduced the entry tax on petrol and diesel from 2 per cent to 1 per cent.
Similarly, it appeared unprepared to take extra burden by giving consumers extra cylinders at subsidised prices a la Delhi chief minister Sheila Dixit, who has raised the cap on subsidised cylinders from six to nine.
Sources said around 10 lakh cylinders are being sold a month to nearly 20 lakh consumers in the state. Mostly people living in urban areas depend on subsidised LPG cylinders.
“We are not imposing any tax on LPG cylinders. However, the government is unlikely to consider providing extra cylinders at subsidised rates to the consumers,” said an official.
According to the Centre’s decision, each household will be now provided six LPG cylinders at a subsidised rate and the rest will be purchased by the consumers at market price. “The LPG is being sold a Rs 411 per cylinder. If the government allows another two cylinders to each customer, it will have to bear an extra burden of Rs 356 per cylinder. As a whole, the state will have to bear a burden of Rs 724 per household and an additional burden of another Rs 142.40 crore,” said another official.
However, officials are tight-lipped on the issue of providing subsidy.
“These are political decisions and will have to be taken a higher level,” said one of them. The state government may take a final call on the issue after finance minister Prasanna Acharya returns from abroad.
