FM Sitharaman’s statement on petrol-diesel price cut triggers controversy in Rajasthan

Jaipur, 23/5:Union Finance Minister Nirmala Sitharaman’s clarification that the entire cost of the reduction in excise duty on petrol and diesel will be borne by the Central government and the state’s revenue won’t be impacted by the move has triggered a political controversy in Rajasthan.

It has nullified the claims of Rajasthan Chief Minister Ashok Gehlot, who had said that the recent fuel price cut by the Central government will lead to an annual revenue loss of Rs 1,200 crore for the state.

Soon after the price cut, Gehlot had said, “due to the excise cut by the Central government in petrol and diesel price, the state government’s VAT on petrol will be reduced by Rs 2.48 per litre and the diesel price shall be reduced by Rs 1.16 per litre which will make petrol cheaper by Rs 10.48 and diesel by Rs 7.16 per litre in the state. Due to this, there will be a revenue loss of about Rs 1,200 crore per year to the state. The state had suffered a revenue loss of Rs 6,300 crore due to the reduction of VAT twice in the past. By adding today’s deduction, the state will suffer a revenue loss of about Rs 7,500 crore per annum”.