Union Finance minister Arun Jaitely has justified the hike in excise duty on petrol and diesel even as the Opposition charged the BJP-led NDA government with “profiteering” from the fall in global oil prices. Speaking in Rajya Sabha on Wednesday, the Leader of the House also told that for the first time, fiscal deficit target will be met without budgetary cuts.
The Opposition raised the issue shortly after the house reconvened in the morning criticising the increase in excise duty on petro products at a time when the global crude prices had drastically fallen.
“This will happen for first time, we will achieve fiscal deficit (target) without fiscal cuts,” Union Finance minister Arun Jaitley said on the floor of the Upper House during Zero Hour stressing the drop in oil prices is passed on to consumers as petrol prices have been reduced 20 times and that of diesel 16 times.
He further added that the earlier governments used to achieve fiscal deficit targets by resorting to expenditure cuts, citing that during the previous Congress-ruled UPA regime, the cut was as high as Rs 1.20 lakh crore.
“The government was following proper fiscal planning and India should take advantage of falling oil prices,” Jaitley said.
Earlier, raising the issue, Congress party’s deputy leader Anand Sharma said that in last one year, the price of crude oil had fallen from USD 111 to USD 35 but the government was not passing the benefit to people.
The Congress leader also added that government saved USD 88 billion on account of fall in global crude oil prices and alleged that the government was “profiteering” from the sharp drop in crude prices and trying to cover up for its “fiscal mismanagement”.
Soon after Anand Sharma, CPI (M) senior MP Tapan Sen questioned the taxation structure and said the global crude prices had fallen so drastically that the current retail prices of petrol and diesel could be halved even after keeping a mark-up of 25 per cent.
Parties like CPI (M), JD(U), SP, BSP, BJD and DMK, as well as NDA ally Akali Dal, also raised the issue.
Responding to the criticism, Jaitley backed the rationale behind hike in excise duty, saying that following reduction in fuel prices by oil companies, many a times, state governments, including those led by Congress, resorted to hiking the VAT rates. He also said that the revenue from excise collection is also shared with the states and even with the oil companies, which make up for their past losses.
The government today increased excise duty on petrol by Rs 0.30 per litre and by Rs 1.17 a litre on diesel to make use of slump in oil prices to garner an additional Rs 2,500 crore.
Watch the full video of the discussion in Rajya Sabha below:
(With inputs from the PTI)