Official figures on oil bonds expose Modi govt’s falsehood, alleges Congress | India News – Times of India

NEW DELHI: Issuing a strong rebuttal to finance minister Nirmala Sitharaman’s argument that the Modi government would not cut excise duty on petrol and diesel for now because it has to pay for the oil bonds issued by the UPA in the past, the Congress on Tuesday demanded the ruling dispensation to pass on the benefit of reduced international crude oil prices to the people and accordingly reduce the rates of the petroleum products.
Congress general secretary Ajay Maken, while holding a press briefing, charged that the consistent increase in the prices of LPG, CNG, PNG, petrol and diesel exemplifies the Modi government’s arrogance.
He demanded that petrol and diesel should be brought under the GST and said the Congress urged the Modi government to immediately roll back the excise duty hiked on the two petroleum products in the last seven years.
Maken also alleged that the official figures of the Modi government exposes the BJP’s oil bond falsehood.
His remarks came after Nirmala Sitharaman ruled out a cut in the excise duty on petrol and diesel for now, saying that the government has to pay for the oil bonds issued by the UPA in the past.
Sitharaman has said if she did not have the burden to service the oil bonds, she would have been in a position to reduce excise duty on fuel. “A significant amount is going for interest payment and principal repayment. What unfair burden on me,” she said, adding, “previous government has made our job difficult by issuing oil bonds. Even if I want to do something I am paying through my nose for the oil bond”.
Sitharaman has said that the interest on oil bonds paid in the last seven years totalled Rs 70,195.72 crore. Of the Rs 1.34 lakh crore of oil bonds, only Rs 3,500 crore of principal has been paid and the remaining Rs 1.3 lakh crore is due for repayment between this fiscal and 2025-26, she said.
According to the finance minister, petrol and diesel as well as cooking gas and kerosene were sold at subsidised rates under the previous Congress-led UPA government. “Instead of paying for the subsidy to bring parity between the artificially-suppressed retail selling price and the cost, the then government issued oil bonds totalling Rs 1.34 lakh crore to the state-fuel retailers,” Sitharaman added.
However, Ajay Maken disagreed with the finance minister. Furnishing his own figures, he said since 2014-15, the Modi government has spent Rs 73,440 crore on servicing of oil bonds. Against this, they have collected Rs 22.34 lakh crore through taxes on petroleum products.
Spending on servicing of oil bonds is just 3.2 per cent of the tax collection from petroleum products. The real reason is not oil bonds but reduction in subsidy by 12 times and Increase of taxes by three times, he said.
He said in the current fiscal also, the government has only a liability to pay Rs 20,000 crore in the form of bond repayment and interest on the outstanding oil bonds. At the present rates, the government is expected to collect Rs 5 lakh crore from taxes on petroleum products.
Moreover, Maken said, the first oil bonds worth Rs 9,000 crore were launched on April 1, 2002. The payments for these were to be made in 2009. UPA never cribbed, because servicing of bonds is a miniscule part of the total revenue collected from the petroleum products.
He said, “In 2020-21 alone, Modi Tax on petrol and diesel was Rs 4,53,812 crore. It is three times more than 2013-14,” he said.
Maken said the BJP raised central taxes on petrol and diesel by Rs 23.87 and Rs 28.37 per litre in seven years. The Modi government collected additional Rs 1,89,711 crore every year. It has “extorted” Rs 22,33,868 crore by levying excise on petrol and diesel in the last seven years.
“Consistent increase in the prices of LPG, CNG, PNG, petrol and diesel exemplifies Modi government’s arrogance.”
According to Maken, the official figures of Petroleum Planning and Analysis Cell informs that the UPA government gave subsidy on petroleum products to the tune of Rs 1,64,387 crore in 2012-13 and Rs 1,47,025 crore in 2013-14. On the contrary, the present Modi government drastically reduced this amount year after year to Rs 12,231 crores in 2020-21.
He said, “Since the lockdown, the increase in excise duties on petrol and diesel has surpassed all forms of exploitation and extortion.” On March 5, 2020, excise duty on petrol and diesel was increased by Rs 3 per litre. On May 5, 2020, the Modi government increased the excise duty on diesel by Rs 13 per litre and on petrol by Rs 10 per litre.
“In the last 15 months, the insensitive BJP government had raised petrol and diesel rates by Rs 32.25 and Rs 27.58 per litre respectively.”
The Congress leader said the Modi government should immediately roll back its increase in excise duties, so as to bring those to the level of excise duties prevailing during the UPA government. The excise duty of Rs 23.87 on petrol and Rs. 28.37 on diesel should be reduced.
He said when the Congress government demitted office in 2014 and the Modi government came to power, the price of crude oil in the international market was 108 dollars per barrel. Petrol was being sold at Rs 71.51 per litre and diesel at Rs. 57.28 per litre. “However, today the prices of crude oil in the international market is 69.22 dollar per barrel, which means the prices of crude oil have come down by 36 per cent in the international market. But, in India prices of petrol have registered an increase of 42 per cent and are being sold at Rs 101.84. The diesel prices have been increased by 57 per cent and are being sold at Rs 89.87 per litre.”
Maken was of the view that daily dynamic pricing is another fraud on the people of India. The international prices of crude have gone down but the prices of petrol and diesel are the same for the last one month. It was Rs 101.84 and Rs 89.87 on July 17, 2021 and is still the same today.
He said, “Why cannot the government lower the excise on petroleum products? Because by lowering corporate tax, the government needs more money to match its spendings. The cost of lower corporate tax rates for the government is being borne by citizens in the form of higher petrol and diesel prices.”
He said the gross tax revenue as a percentage of the GDP reached an all-time high of 12.11 per cent in 2007-08. The gross tax revenue was at 11.22 per cent of the GDP in 2017-18 and fell to 10.25 per cent of the GDP in 2020-21.
The Congress general secretary said the recent fall has been more because of a fall in corporate tax collections. In 2017-18, the corporate tax collections amounted to a total of 3.34 per cent of the GDP and fell to 2.32 per cent of the GDP in 2020-21. This was despite the listed companies registering bumper profits during the financial year.
He said corporate taxes have come down primarily on account of the base tax rate being cut from 30 per cent to 22 per cent in September 2019 and to 15 per cent from the earlier 25 per cent for new manufacturing companies.
In absolute terms, Maken said, the total corporate tax collected in 2019-20 had stood at Rs 5.57 lakh crore. It fell to Rs 4.57 lakh crore in 2020-21, thanks to lower tax rates. The collections of the goods and services tax have also not gone along expected lines.
The Congress leader said to compensate for this to some extent, the government has increased the excise duty on petroleum products. “Hence, it is only fair to say that the cost of lower corporate tax rates for the government is being borne by citizens in the form of higher petrol and diesel prices.”
Maken said, “We are not against providing any relief to the corporate sector since it has an important role in nation building but we are against fleecing the poor, the farmers and the common people to compensate for fall in gross tax revenue from the corporate. Why should the common men suffer to please ‘Hamare Do’ of ‘Hum Do’ ki Sarkaar. The government should control its extravagance to compensate for any shortfall in revenue due to reduction of corporate taxes.”

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