Fuel price

~59.98 and diesel at ~46.09 per litre, HT reported on Thursday,

According to the oil ministry’s data-keeper Petroleum Planning and Analysis Cell (PPAC) the price of the Indian crude oil basket, which factors in the rupeedollar exchange rate, extended the slump to ~2,396.78 on March 12. Experts said there was room to reduce petrol and diesel prices, but the opacity of retail fuel prices in India prevents consumers from reaping the full benefits of an international oil price slump.

This is not the first time that the government has raised excise duty on fuel despite a steep decline in the price of crude, seeking to augment its revenues. To be sure, there have been instances in the past too of the government cutting excise duty to cushion the consumer when global prices surged, a second official said on condition of anonymity.

The government is battling an economic downturn that is expected to lower growth in the 2019-20 fiscal year.

“The global economic slowdown due to coronavirus has halted almost every sector and this hike in excise duty would help the government in generating revenue and resources for development of infrastructure” and so on, said Vishal Raheja, deputy general manager of tax research and consulting firm Taxmann.

The Centre found it timely to raise additional money to make up for a shortfall in budgeted direct and indirect tax revenue because of the economic slowdown, the first official said.

“While the benefit of reduction of crude prices in the first quarter of this year has significantly gone to the consumer, the government has taken this step of increasing {excise} duty to raise some revenue in view a tight fiscal situation. This would help in generating the resources for development of infrastructure,” the official said.

“Even with this increase in the duties, the prices of petrol and diesel would fall further on account of a significant fall in the crude price. It may be noted that the prices of petrol and diesel have already fallen by more than ~6 per litre since the second week of January,” the official said.

The global crude oil price, which was around $66 per barrel in January 2020, fell to about $51 a barrel in the first week of March. It crashed to about $32 this week.

The Congress party plans to raise the issue both inside and outside Parliament to pressure the government to pass on the benefit of low international crude oil prices to the people.

Congress party national spokesperson Sanjay Jha wrote in a tweet, “Crude oil prices have c o l l a ps e d, a nd c o nsumer demand is low. But this callous government is taxing Indians by imposing excise duties on petrol and diesel?? Making merry in this depressing #Coronavirus environment?? This is a crude government. A rude government.”

Vishal Raheja, deputy general manager of tax research and consulting firm Taxmann, said, “It is noteworthy that earlier benefit of rate reduction has been passed on to consumers but t hi s t i me government has decided to not pass on the benefit and raise revenue in this tight fiscal deficit situation. The global economic slowdown due to coronavirus has halted almost each sector and this hike in excise duty would help government in generating revenue and resources for development of infrastructure etc.”

Economists praised the move. “This balance by the government is a good strategy. This also helps the state shore up some revenue for other useful expenditures,” said NR Bhanumurthy, economist at the National Institute of Public Finance and Policy in New Delhi. average hike is still being worked out as proposals have not been finalised,states such as Haryana and Sikkim, where current wages are at ₹284 and ₹192, may receive an increase of ₹30.

Uttar Pradesh, India’s most populous state, may receive an increase of ₹13—the lowest proposed hike.

Last year, the Centre received flak for offering a negligible increase in MGNREGS wages. The hike for FY 2019-20 ranged from ₹1 to ₹17 with an average hike of just 2.6% but this year, the proposed higher minimum increase of ₹13 has raised hopes of a more substantial increase.

The new rates would be applicable from April 1, 2020 and the government has just over a fortnight to notify them.

Union rural development minister Narendra Singh Tomar will clear the file before the new rates are notified.

The jobs programme offers 100 days’ assured employment every years to at least one member of every poor rural household at federally fixed minimum wages and 60% of its funds must go to agriculture and allied activities. The scheme completed 10 years in 2016. More than 127 million people are engaged in MGNREGS jobs. or under a particular Act -- are released. Let every individual of J&K be released from jail. Let the political process start... Let democracy prevail and then we can pick up other fights,” he said, also seeking restoration of statehood for Jammu and Kashmir.

On Friday, soon after his r el ease, Farooq Abdullah refrained from making any political statement, saying he will speak for the people in Parliament.

“I am grateful to all the people of the state and to all the leaders of the country who spoke for our freedom. I am also grateful to every individual who prayed for us. But this freedom is not complete when Omar Abdullah, Mehbooba Mufti and other leaders are either in prison in the state or outside or under house arrest. I hope the government will take action soon to release everyone if they want the people of the state to enjoy freedom. I am grateful to you,” Abdullah told reporters.