BY A K SAHOO in Bhubaneswar, April 8, 2018: Politics in Odisha is once again heated up over the rise in petrol and diesel prices. The ruling Biju Janata Dal (BJD) on Saturday took to the streets blaming the BJP-led NDA government at the Centre for the “increasing” hike in the fossil fuel.

Biju Yuba Janata Dal activists undertook “leaflet” awareness drives across the state, telling people how that the BJP had “failed” to contain petrol and diesel prices despite fall in the crude oil prices in the international market.

The BJP, in its defence, – convened a press conference at the party’s state headquarters in Bhubaneswar where its leaders came out with the figures showing the state’s Value Added Tax on petroleum products and its share in Central Excise Duty levied by the Union government.

The BJP leaders tried to expose the BJD’s “hypocrisy” on the issue. They said, – from each liter of petrol sold in Odisha, the state government got Rs 29.28 which included the state’s own Value Added Tax (VAT) of Rs 14.32. Similarly, per each liter of petrol sold in Odisha, the state government got Rs 25.64 which included the state’s VAT of Rs 15.33.

The BJP leaders also sought to impress that the state government was just shedding crocodile tears without genuine intention to come to the rescue of the consumers. They contended that the Naveen Patnaik government, in fact, was heavily relying on the tax revenue it earned from the petroleum products to manage itself.

In 2014-15 fiscal, the Odisha government got VAT revenue on petroleum products to the tune Rs 3046 crore. The figure shot up to Rs 4521 crore in 2016-17 fiscal.

The BJP leaders dared the state government to remit a portion of tax on the petroleum products so that the consumers will have some relief.

Let’s examine some facts.

The Union government, following demands from various political parties, had on October 3, 2017 reduced the Central Excise on petroleum products by Rs 2. While many states hailed the decision, the Odisha government objected to it by saying such a reduction resulted in the state losing at least VAT of Rs 1.36 per liter of petrol and diesel.

This stand of the state government, faced with the challenge of augmenting its own revenue, clearly indicated that it cannot afford to lose the VAT it enjoyed petroleum products as well as its share from Central Excise Duty levied on fossil fuels.

Politics or no politics, – everyone feels petrol price needs to be controlled and a mechanism must be devised for this. And, it should be acceptable by both the state and Union government. However, as it seems, both the establishment would never be in hurry to find an alternative mechanism as the present arrangements help them cushion their coffers against any possible financial uncertainties.

Union petroleum and natural gas minister Dharmendra Pradhan has suggested for bringing the petroleum products under the ambit of Goods and Services Tax (GST) which he feels will be the best bet to contain the prices. The BJP state unit has given call to the BJD leadership to raise this issue to in GST Council.

But it is very unlikely that Odisha or for that matter any other state would demand to ever make such “unrealistic” demand given the fact that it would substantially reduce their share in central taxes, seriously deflating the size of the coffers.

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