'Centre devoured Rs 26 lakh crore from fuel prices but they blame states': Stalin, PTR hit back

"To blame the opposition ruled States for the steep hike in fuel prices is akin to trying to cover a pumpkin in a handful of rice," CM Stalin said in a tweet.
CM M K Stalin. (Photo | A Raja Chidambaram, EPS)
CM M K Stalin. (Photo | A Raja Chidambaram, EPS)

CHENNAI: Chief Minister MK Stalin and Finance Minister Palanivel Thiaga Rajan on Thursday pounded lock, stock and barrel the claims made by Prime Minister Narendra Modi on the fuel price hike issue.

PM Modi had asked the opposition-ruled states of Maharashtra, West Bengal, Telangana, Andhra Pradesh, Kerala, Jharkhand and Tamil Nadu to reduce VAT on petrol and diesel and cushion the fuel price blow that people have been reeling under.

The State Assembly saw the Chief Minister and the Finance Minister strongly rebutting the Prime Minister in a discussion on Modi's request.

Later, expressing his views through tweets on the discussion in the State Assembly, the Chief Minister said, unlike the Union BJP government which has the habit of increasing the fuel price immediately after elections get over, the DMK government in TN reduced the petrol prices after winning the elections.

"The politically aware people of TN are not oblivious to these simple facts and it's only a matter of time before the rest of India sees through the bogus claims of the BJP govt," he added.

"Having made hay out of the decline of crude oil prices and devoured Rs 26 lakh crore from fuel prices in the last eight years, to blame the opposition ruled States for the steep hike in fuel prices is akin to trying to cover a pumpkin in a handful of rice," Chief Minister said in another tweet.

During the zero hour discussion in the assembly, the Chief Minister had criticised the contention of the Prime Minister that the prices of petrol and diesel could not be brought down in the country only because certain states had failed to reduce the VAT on these fuels.

Stalin charged that since 2014, the Union Government did not pass on the surplus revenue accrued due to the fall in crude oil price and instead feasted on the windfall. Also, he said the Union Government had reduced the excise duty on fuel since this had to be shared with the States. So, not only was the common man hit, the income of the states was also appropriated.

"Since the cess and surcharge on fuel did not need to be shared with the states, the Union Government hiked these taxes massively and took away the lakhs of crores of rupees thus collected leaving a big burden on the people. Just ahead of elections in some states, as a token gesture, the Union Government had reduced the taxes on fuels. But once the elections were over, they hiked the fuel prices manifold," the Chief Minister charged.

Contrary to this stance taken by the Union Government, despite Tamil Nadu's not-so-good financial position, the state government had reduced their share of tax on petrol in the interest of the people, he reminded everyone.

"The people of Tamil Nadu knew well who has real intention to reduce fuel price and who is pretending to reduce it while passing the buck on others. I leave it to the wisdom of the people," the Chief Minister added.

Later, Finance Minister Palanivel Thiaga Rajan gave a professorial lecture on the economic principles behind taxation and how these affect and benefit the people when the government takes decisions. He said the fuel prices have a direct impact on the input costs of the farmers, fishermen and many other sections of the society and would lead to inflation.

"Whenever the DMK government is in power, it has reduced the tax on fuels to benefit the people. There is no occasion when the DMK government hiked the fuel price. During the tenure of former Chief Minister M Karunanidhi, tax on fuels was reduced thrice since 2003 and now, it has been brought down once," Rajan said.

The Minister pointed out that since Prime Minister Narendra Modi assumed office in 2014, the tax on petrol has been hiked three-fold and now reduced it by just 5%. Similarly, the tax on diesel had been increased sevenfold since 2014.

In contrast, in Tamil Nadu, the State tax on fuels has gone up only by 50% during the past seven years.

"Had the Tamil Nadu government hiked the tax on fuels whenever the Union Government did, now we can also reduce the tax when the GOI effects a reduction. But Tamil Nadu government did not hike the tax when the Union Government did that. Without considering this fact, demanding a reduction of tax by the State government is unfair. How can we accept that we are against cooperative federalism?" Rajan questioned.

"The Prime Minister has spoken about cooperative federalism. Tamil Nadu runs its own medical colleges by spending its own funds. But the Union Government insists that the examination should be conducted under its law. Is this cooperative federalism? Once upon a time, if one rupee went to the Union Government as tax from the State, 60 paise returned to Tamil Nadu. Over a period, now it has shrunk to just 35 paise. Even in that, the Union Government dictates that this amount should be spent this way and puts forth a hundred-plus odd conditions. The share of funds from the Union Government for schemes gets reduced year on year and at one point of time, the GOI relieves itself and leaves the entire cost for the schemes to the State government. Is this cooperative federalism?," the Finance Minister wondered.

Later, talking to reporters at the secretariat, the Finance Minister criticised the Union government that they (the Centre) collected taxes but did not share them with state governments properly.

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