BHUBANESWAR: The Centre’s decision to cut fuel price by Rs 2.50 per litre has put the ruling BJD headed by Chief Minister Naveen Patnaik in a difficult situation.
The party, which made fuel price a major issue against the Centre, has maintained silence over the call given by Union Finance Minister Arun Jaitley to reduce VAT rates.
Odisha generates Rs 7000 crore from VAT on petrol and diesel now. The State earned Rs 3000 crore from this source in 2014. The rate of VAT on petrol and diesel in Odisha now is 26 per cent. Any cut in fuel price will adversely affect revenue generation and strain the State coffers for implementation of the ongoing populist schemes launched by Odisha Government.
Official sources maintained that the State Government will lose huge revenue if it lowers VAT rate on fuel. The State will incur a loss of 64 paise per litre because of the price cut by the Centre. If the State Government cuts fuel price by Rs 2.50 per litre to match the Centre’s gesture, it will face serious challenges for implementation of the populist programmes which have turned out to be good vote earners.
Realising that BJD is on the back foot over the issue, the State BJP went on the offensive by holding a massive rally here seeking immediate cut in State’s VAT rate on fuel prices.
Describing the Government’s response to the price cut by Centre as unfortunate, BJP State vice-president Sameer Mohanty said the party will launch a Statewide agitation if Odisha does not cut VAT on petrol and diesel.
On Thursday, Finance Minister Sashibhusban Behera had said that Odisha will take appropriate action after examining the Centre’s announcement.