[gsurya]

Originally Posted by SchumiFan

A highly enlightening piece. I would say it is a good move by the Govt. The extra money can be used as a reserve for subsidy or invested in schemes for the welfare of the people.

We might need to have stable fuel prices so that any extra amount recovered can actually be used for improving the lifestyle of the public.

Fully agree, important welfare schemes like NREGA, Food Security Bill, RTE etc need heavy funding & fuel tax is one of the most important components of both state & central tax revenue.

If crude stays below 100 for the next 3 yrs then even if we grow around 6% on avg we can manage fiscal situation & also increase infra investments significantly.

[gsurya]

Originally Posted by ckranjan

Increasing excise duty is a good move, however the excise duty that is levied on both the fuels are not same. There is a Rs 6 / L of special excise duty on petrol. Why petrol consumers should bear this extra tax? On top of that most of the state govt.s have more taxes on petrol than diesel.

There should be a parity in terms of taxes on both the fuels. My 2 cents.

Petrol is seen as the 'Personal consumer' fuel & Diesel as public/goods transport. Hence, taxes on the latter have always been lower as they directly impact inflation directly.

Only Goa has been the exception in removing taxes on petrol to benefit the personal consumer; now proving bad with Goa's finances struggling compounded by mining ban.

[poloman]

Originally Posted by gsurya

Not sure how one month's WPI numbers is relevant to a discussion on increase in excise duty?

In fact LPG/CNG prices are due to now go UP due to Govts increase of royalty, so we can expect auto / bus rates to go up, not down, in next few months.

Hotel rates are mainly linked to location, availability, occupancy & taxation - nothing to do with fuel.

You wanted to debate the Govt and this is also a major item to debate. This is mainly due to better financial management by the Govt.Now some may argue the inflation is down due to the fall in crude prices. That is where I said the benefit of fall in fuel prices are yet to reach the consumers at the lower rung in the form of reduced bus charges, transportation charges and reduced price of items in restaurants (I used the term hotels before)which use fuel for cooking.
So one cannot keep on reducing the fuel prices only because crude prices are falling. This will increase consumption and again import bill will spiral up.The fall in fuel prices in India is almost same as that in US for last 6 months or so.

[gsurya]

Originally Posted by poloman

You wanted to debate the Govt and this is also a major item to debate. This is mainly due to better financial management by the Govt.Now some may argue the inflation is down due to the fall in crude prices.

I am surprised understanding my viewpoint is so hard:

• This party in power did Bharat Bandhs against fuel price hikes when crude zoomed to 120$
• They promised to reduce fuel taxes "like goa"
• They opposed petrol price deregulation & 50 ps per month diesel price hike on grounds it would cause inflation

I am just asking how excise duty hike is now justified by the same guys. Even though I support the move on economic grounds & believe the previous Govt would have likely done the same.

[poloman]

Originally Posted by gsurya

I am surprised understanding my viewpoint is so hard:

• This party in power did Bharat Bandhs against fuel price hikes when crude zoomed to 120$
  Th
• They promised to reduce fuel taxes "like goa"
• They opposed petrol price deregulation & 50 ps per month diesel price hike on grounds it would cause inflation

I am just asking how excise duty hike is now justified by the same guys. Even though I support the move on economic grounds & believe the previous Govt would have likely done the same.

This is the modus operandi of every opposition party in the whole of the world. So public should be wise enough what they should expect and what not.Obama promised to bring unfathomable change in Washington in 2008, now see where he stands. Now that the crude price is falling the current opposition is not getting an opportunity to do a Bharat Bandh. That is all. Are we foolish enough when some party promise they will do away with fuel taxes as in Goa, when this is the main source of revenue for State and Central govt in the country.
Unlike the previous govt this govt has done some commendable work on the supply side of essential goods that is why I talked about reduction in WPI and retail inflation which was the real reason for the end of previous govt.
I support the Govt when it increase the excise duty slightly because that will only help exchequer like you and me. But at the same time appalled when they are not taking steps to make the fall in fuel prices trickle down. They should force truckers,STCs and private bus operators to reduce fares. In India price of such services only goes up. This is the real sad part.

[SchumiFan]

Originally Posted by gsurya

I am surprised understanding my viewpoint is so hard:

• This party in power did Bharat Bandhs against fuel price hikes when crude zoomed to 120$
• They promised to reduce fuel taxes "like goa"
• They opposed petrol price deregulation & 50 ps per month diesel price hike on grounds it would cause inflation

There was a time when Indian Rupee was at 45-50 against the $ (2010~11, I guess) and petrol prices were in the region of Rs.60 as well. If the previous govt. had used the opportunity and increased taxes to shore up the revenue, then they could have cut it back when the crude oil prices were increasing. I am not sure if such a task was done by that govt.

'Goa' like prices - Goa is supposedly suffering shortage of finances because of this rule. No matter how popular it is with the public, do we want the same to happen country wide?

Inflation - valid concerns from the opposition; but since now inflation is dropping, isn't the right time to do the exercise of increasing taxes to shore up the revenue?

This Govt is doing things at the right time something that was not done before. Maybe it will help when crude prices go north in the future or maybe not.

The effort is there to see, whether it will materialize to fruition remains to be seen.

Mods: If this post feels out of place in this thread, please delete.

[JoseVijay]

As per businees news in one of the regional channels here, the Government of India is going to earn a revenue of 6,000 crores due to the hike in excise duty. Also there were other reports saying that the Indian oil Corporation does not have any intentions of increasing the fuel prices.

[audioholic]

Originally Posted by JoseVijay

As per businees news in one of the regional channels here, the Government of India is going to earn a revenue of 6,000 crores due to the hike in excise duty. Also there were other reports saying that the Indian oil Corporation does not have any intentions of increasing the fuel prices.

That's because the oil companies are compensating the excise increase with the planned drop in fuel prices. Net result is that the price will remain the same as before.

One minor contribution from man is a one big chunk of money for the government That's a large sum of money earned.

Any idea what speed 97 now costs? Want to give it a shot on my vehicles and see if there's any difference

[gsurya]

Originally Posted by poloman

This is the modus operandi of every opposition party in the whole of the world. So public should be wise enough what they should expect and what not.

Are we foolish enough when some party promise they will do away with fuel taxes as in Goa, when this is the main source of revenue for State and Central govt in the country.

Unlike the previous govt this govt has done some commendable work on the supply side of essential goods that is why I talked about reduction in WPI and retail inflation which was the real reason for the end of previous govt.

You just called the whole Acche Din campaign a fraud. I am glad I didnt fall for it. And some of us do expect political parties to try to do what they campaign for, not survive on U-turns later.

I dont suppose you can share a link on this 'commendable work on supply side of essential goods'? If you are willing to accept a single month's WPI/Inflation data as a trend, I am not worthy of debate.

[gsurya]

Originally Posted by JoseVijay

As per business news in one of the regional channels here, the Government of India is going to earn a revenue of 6,000 crores due to the hike in excise duty. Also there were other reports saying that the Indian oil Corporation does not have any intentions of increasing the fuel prices.

This makes no sense. If Govt is making PSUs absorb the increase of excise duty, is fuel price really deregulated or is it a sham?

If there is a fuel price reduction on account of crude, that should be accounted for separately not as a canceling out of the excise duty raise!

[poloman]

Originally Posted by gsurya

You just called the whole Acche Din campaign a fraud. I am glad I didnt fall for it. And some of us do expect political parties to try to do what they campaign for, not survive on U-turns later.

I dont suppose you can share a link on this 'commendable work on supply side of essential goods'? If you are willing to accept a single month's WPI/Inflation data as a trend, I am not worthy of debate.

I am not a Govt spokesman to defend what the govt is doing. But some steps like releasing large quantities of wheat and rice from FCI godowns to open market, bringing onion and other vegetables under essential commodities act, steps to amend APMC act. imposition of stock limits to check hoarding, hiking minimum export price of volatile items like onions all have helped. There is a panel closely monitoring prices of essential commodities on a regular basis. Import of items are triggered along with restrictions on exports if the prices are showing signs of rise. Also constant increase in minimum support price of food grains is being resisted.

Sorry for the digression from the topic.

[longhorn]

This whole deregulation saga is a sham to fool the gullible public. They are already maintaining a buffer of at Re 1. when the price revision happened on Nov 1st. Now another so called buffer of Rs 1.50 is being added in the form of additional excise duty. They say they will use this buffer to cushion the public if the price rises drastically. Where all this money (13000 crores as per some estimates) will go - your guess is as good as mine. Why do they want to repeat the same mistake as the previous govt? At least learn from their mistakes and don't repeat the same. If you want to artificially control prices why deregulate in the first place? Why can't you let market forces decide the price every fortnight and get rid of this subsidy/control crap. That would do the economy a whole lot of good in the long term.

[GTO]

Moderator Note: Team-BHP's rules don't permit any political discussions. Request to please avoid the same. Thanks!

[harry10]

So will there be any price cut or the excise duty has absorbed it?

[sgiitk]

Originally Posted by harry10

So will there be any price cut or the excise duty has absorbed it?

Noty this time round, maybe in a fortnight!