Sonia asks states to cut sales tax on petrol items

CHAOS IN CONGRESS: The party is trying to project that the aam admi still tops their list of concerns.

Other stories in the section:

India a victim of international crude prices: FM

Inspite of a surge in oil prices, FM has ruled out any further price hike.

• UPA says no to immediate fuel price hike
• Missing pilot's kin appeals to Naxals to free him

Featured Blog

Rajdeep Sardesai

Bhiwani to Beijing: Lessons from a journey

Featured Slideshows

Related Headlines

powered by

• India a victim of international crude prices: FM
• UPA says no to immediate fuel price hike
• Missing pilot's kin appeals to Naxals to free him

Keywords: Petroleum Products, Sales Tax

New Delhi: A day after the staggering fuel price hike, Prime Minister Manmohan Singh and Congress chief Sonia Gandhi on Thursday asked state governments to lower sales tax on petroleum items.

With the Congress-led coalition facing flak from both friends and foes of the UPA and supporting Left parties, which have called bandhs in states ruled by them, Sonia tried to project that the aam admi still tops their list of concerns.

Meanwhile, the Kerala government has already announced that it will sacrifice a part of the sales tax revenue from petroleum products to help consumers, Chief Minister V S Achuthanandan said on Wednesday.

But a final decision on the rate of reduction will be decided only after Finance Minister Thomas Isaac returns from his foreign trip.

Quick to dissociate itself from the Centre’s unpopular decision, the Left, too, set in motion two issues on Wednesday – a 12-hour bandh in Left bastions to protest the oil price hike, and sales tax relief on petroleum products.

The state government reduced the rate of sales tax on petrol from 25 per cent to 20 per cent and on diesel from 17 per cent to 12.5 per cent.

This would lower the higher retail price of petrol and diesel by Rs 2.12 and Rs 1.38 respectively, Finance Minister Asim Dasgupta said after a meeting with Chief Minister Buddhadeb Bhattacharjee.

UPA’s last ditch efforts

Hours after the fuel price hike was announced, the Congress had set up a seven-member poll committee consisting of veteran Congress leaders to chalk out a strategy to counter the drubbing it has receiving before General Elections.

Meanwhile, the Government is also expected to take steps to cushion the impact of the fuel price hike on farmers.

A meeting of the Cabinet Committee on Economic Affairs may announce the minimum support price for kharif crops like paddy, arhar and soya bean.

The Commission for Agricultural Costs and Prices had suggested a Maximum Sale Price of Rs 1,000-1,050 a quintal for paddy, a jump of nearly Rs 300 over last year's sale price.

Having exercised most of its options in controlling inflation, the Government is hopeful that a good monsoon and a resurgent farm sector would ease the inflationary pressure over the coming weeks.