Tax savvy government Disappointing news
With reference to the report, “LPG prices raised by ~86, steepest hike in India’s history” (March 2), oil firms have once again revised the rates of aviation turbine fuel (ATF) and cooking gas from March 1, based on global oil prices and the foreign exchange rate in the month before.
While the price of ATF was raised by a marginal ~214 per kilolitre to ~54,293.38 per kilolitre, the market price for nonsubsidised cooking gas cylinder, LPG, shot up from ~651.50 to ~737.50 for a 14.2 kg cylinder. The hike was termed a reflection of international trends.
The report says that the latest jump in prices comes on the heels of the ~66.5 per non-subsidised cylinder increase effected from February 1. Thus, there has been a 58 per cent upswing in six instalments since October 2016. Meanwhile, prices of subsidised LPG cylinders went up eight times — by nearly ~2 per cylinder.
The government had reaped a rich financial harvest on behalf of stateowned oil marketing companies by keeping prices of petroleum products high (by hiking excise duties) even when global prices of crude oil were at their lowest — around $40 per barrel — in international markets. Of course, the government never failed to take credit for keeping its subsidy-linked bill quite low during all these years.
The current uptrend in the prices of non-subsidised gas cylinders could be the tip of the iceberg, as global prices of crude oil are bound to rise more in the near future, if recent proposals and some tactical moves of Organization of the Petroleum Exporting Countries and other oil-producing countries are any indication.
It is unlikely that the tax savvy government would consider readjusting its taxation regime (as applicable to various oil products) for the sake of domestic end users. S Kumar New Delhi Urban Development, Housing and Urban Poverty Alleviation Minister M Venkaiah Naidu’s statement that not a single proposal for developing affordable housing received by his ministry was satisfactory is disappointing news.
Prime Minister Narendra Modi’s efforts to help the poor and middle classes, who do not have houses of their own, have come to naught. One month has passed since the Budget notified a slew of incentives for developers. Yet there are no takers for the affordable housing scheme.
The Budget allocated higher investment for affordable housing and accorded infrastructure status to the project. The latter step should enable this project to enjoy the associated benefits. It is also in line with the election manifesto of the Bharatiya Janata Party to provide houses to all by 2022. This has been emphasised in each Budget of the Bharatiya Janata Party (BJP) government at the Centre. To this, Budget 2017 added the notification that 10 million houses would be built for the poor by 2019.
Builders and developers must take advantage of the incentives available for this project and embark on building low-cost houses. The ambit of the scheme has been widened to cover people with an annual income of up to ~18 lakh. Modi had also announced sops.
However, the situation is different now. Developers and builders are trying to liquidate inventory to pay off debts. Instead, they should convert the unsold inventory into affordable units, especially those projects that are under construction.
The government should permit such a conversion; this might help builders make up for their financial crunch. Land should be made available to them for free.
A Sathyanarayana New Delhi