Press Trust of India
New Delhi, Dec 16: Justifying the hike in excise duty on petrol and diesel, Finance Minister Arun Jaitley Wednesday said for the first time fiscal deficit target will be met without budgetary cuts, as Opposition charged the government with “profiteering” from the fall in global oil prices. “This will happen for first time, we will achieve fiscal deficit (target) without fiscal cuts,” he said in Rajya Sabha, during Zero Hour on the Opposition criticism over government’s decision to hike excise duty on diesel and petrol as global crude prices fell to a record low.
He said the earlier governments used to achieve fiscal deficit targets by resorting to expenditure cuts, adding that during the previous UPA rule, the cut was as high as Rs 1.20 lakh crore and “this is a harsh reality.” The government was following “proper fiscal planning” and India should take advantage of falling oil prices, he said. Jaitley further said the drop in oil prices is passed on to consumers as petrol prices have been reduced 20 times and that of diesel 16 times. The Leader of the House was responding to Opposition criticism over increasing excise duty on petro products at a time when the global crude prices had drastically fallen.
Responding to the criticism, Jaitley said that following reduction in fuel prices by oil companies, many a times, state governments, including those led by Congress, resorted to hiking the VAT rates. A part of excise duty on diesel and petrol went towards building national highways and rural roads, the minister said, adding those who drove vehicles “must pay for it”. He further said the revenue from excise collection also shared with states. Besides, oil companies too make up for their past losses. Jaitley said earlier the government used to subsidise petrol and diesel sales in the country to compensate the oil PSUs for their losses. To blunt the opposition charge of not passing benefits of low oil prices to the people, Jaitley said in the past, states like Delhi, Bihar, West Bengal, Himachal Pradesh and Punjab had increased VAT rates immediately after oil companies cut prices.
Jaitley added that he was not finding fault with the states as they too have to raise resources for development. The government Wednesday increased excise duty on petrol by Rs 0.30 per litre and by Rs 1.17 a litre on diesel to make use of slump in oil prices to garner an additional Rs 2,500 crore. As the House met for the day, opposition members waved the supplementary list regarding the excise duty hike on oil.
