Reduce VAT to control fuel price: BJP to states

Speaking to ETV Bharat over rising price of petrol and diesel in the country, Economist and Bharatiya Janata Party's National Spokesperson Gopal Krishna Agrawal said that hike in fuel prices is based on international markets and due to the component of all taxes in the country, petrol and diesel prices have been hiked.

New Delhi:Economist and Bharatiya Janata Party's National Spokesperson Gopal Krishna Agrawal on Friday said that hike in fuel prices is based on international markets and due to the component of all taxes in the country, petrol and diesel prices have been hiked. The petrol and diesel prices hiked 20 times in 2021.

Speaking to ETV Bharat in this regard, Agrawal said that at first, everyone needs to understand the cause of petrol and diesel prices hike and the federal structure of the country.

"Petrol price increases due to international and there are many domestic reasons for it also. We import 85% of the petrol of our need and 70% of our import bill is spent on the import of petroleum price. That is why the situation in India is very crucial regarding the petroleum price, so we have to adopt an alternative source for use of petroleum," Agarwal said.

Speaking about the tax system in the country, Agarwal said, "Both the state government and the state government impose excise and VAT tax on petrol and the component of this tax is very high. As far as the state governments are concerned, the central government transfers 42% of its tax collection to the state government. Apart from this, all the public welfare schemes of the Central Government are also funded by the Central Government to the State Government. So in this case, about 50% of the central government's collection goes to the state governments. So the state governments should reduce and eliminate VAT that oil prices can be controlled."

"The most important thing is that the government should pay attention to renewable energy sources such as solar power and hydropower. Apart from this, a long-term strategy will have to be made in this regard with battery operated vehicles on more and more roads and this strategy should have been made by now but previous governments have done nothing in this regard," he stated.

"This is also the reason that today we are stuck in a bad situation on the petrol price because the old governments used to give subsidy to the oil companies, which is now being repaid by our government. Due to the Covid-19 pandemic, the collection of income tax has reduced considerably and corporate tax has also decreased by about 40%. But the focus now is also towards using renewable sources of energy, which will by 2030 form 40 per cent of energy generated in the country," he added.

"It was a collective duty to work towards clean and green sources of energy as well as energy independence. In the sector and self-reliant India, a lot of expenditure was increased and despite the lower tax collection, the expenditure has been done by the central government. But the opposition and the state governments are not paying attention to this and they are only blaming the government. If the state governments want, they can reduce the price of petrol and diesel in their state by reducing VAT," he added.