New Delhi: BJP on Monday alleged though the oil companies were making profits, the government had increased the prices of diesel, cooking gas and kerosene to keep in check its fiscal deficit which is "going awry due to high
corruption and faulty economic policies".
"The government has reasoned that these prices were increased as international crude prices were increased, due to which Indian oil companies were losing money and the loss due to subsidy was becoming unbearable. But the tax collected last year by the petroleum sector was Rs 1,35,000 crore and the total subsidy is only Rs 40, 430 Crore," senior BJP leader Murli Manohar Joshi said.
He maintained that even after the tax share of states - which roughly amounts to Rs 55,000 crore - is factored in, the government would still be saving Rs 40,000 crore and hence the contention that it is suffering a loss is 'incorrect'.
The senior BJP leader, who is also chairperson of Parliament's Public Accounts Committee, said decreasing customs duty - announced by the UPA government along with the last hike - has nothing to do with crude oil prices as it is determined by the formula of 80 per cent of import price and 20 per cent of domestic price.
He said the government did not want its fiscal deficit - pegged at 4.6 per cent - to go up and so was increasing petroleum prices to prevent any impact on total tax collection.
"The manufacturing sector is going down and the Revenue Secretary has already said you have to choose whether you want revenue deficit or high growth. Both cannot go together. There is every chance that by decreasing prices, tax collection would be affected," Joshi said.
Joshi alleged that when international crude oil prices go down, the Indian government does not decrease it but when they go up the prices here are hiked.
"How long will they continue with this formula? Why are they not raising the production in the country? Government has made it all complicated. There should be a rational formula for petroleum prices and taxes," he said.
He insisted that none of the UPA allies - be it TMC, DMK or NCP- was in agreement with Congress on this fuel price hike.
"To improve its economic health, why are you spoiling the economic health of the common man? And there is no medicine for it. This shows the economic policy of this government is wrong," Joshi said.
The BJP leader maintained that since overall industrial production is down and inflation is up, there is 'stagflation' in the economy. The government is attending to the needs of the big industrial houses. It is supporting corruption. Why is the government not bringing out the real reason for increasing gas prices?" Joshi said.
He insisted that had the government prevented large-scale corruption in 2G spectrum allocation and holding of the Commonwealth Games, the money saved would have helped bring down the fiscal deficit.
BJP was not impressed with the tax cuts announced by Congress governments in Kerala and Haryana and termed them 'cosmetic measures'.
Asked if BJP-ruled states would go for it, Joshi said they have been advised to air their grievances in this regard to the central government and then take a decision.
BJP would demand a debate in the monsoon session of Parliament on the issue of frequent hike in petrol products prices.
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