The Finance ministry’s current economic survey reveals that oil prices are falling. International crude oil prices may have halved since the Modi Government assumed office. But the consumers have not gained. This is due to a wrong taxation policy. The price of petrol and diesel always impact the Union Budget. The centre and state governments have been raising revenue in an extraordinary manner in the last three years. Centre revenue from petrol and diesel has doubled. The oil sector last year yielded Rs. 5.24 lakh crore or 3.5% of GDP. Of course, it is necessary for the Government to tax the oil sector. But linking domestic retail price to international crude price is done in such a mysterious way that consumers do not reap any benefit. It is because governments both at the centre and in the states pocket the gain. What is called reform is rubbished. Even Pakistan passes on more benefits to consumers in the oil sector. It puts Pakistan on a relatively competitive economic footing
Petroleum minister Dharmendra Pradhan has argued that high taxes are justified to cope with massive government expenditure. Even when socialism was the mantra of the Union Government, oil tax rates could be as high as 97.5%. Successive governments rationalised the tax on petrol and diesel. Lowering of petroleum taxes is a must for the common people in the country. That will boost the economic growth of the country and reduce the daily hardship of people in urban and rural areas. It is ironic that in the early stages of the Modi Government and much before Jaitley could play around with the taxation regime oil and LPG prices had come down considerably and people had begun to sing praises of Narendra Modi. Now they regret having spoken too soon. Raising revenue for development does not mean punishing the citizens with sharp rise in oil prices and inflation.
