New Delhi, June 27: BJP today alleged the government had increased the prices of petroleum products to keep in check its fiscal deficit which is “going awry due to high corruption and faulty economic policies”.
The party said the decision was taken despite the fact that oil companies were making profits.
“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. PTI