(Weekly Organ of the Communist Party of India (Marxist)
March 07, 2010
Callous Justification of Petro Price Hike
The Polit Bureau of the Communist Party of
justification of the hike in indirect taxes on diesel and petrol in the
budget in terms of taking a "long-term view" reflects a flawed
economic thinking and insensitivity to the sufferings of
the people due to price rise.
Estimates suggest that the government seeks to mobilise between Rs 25,000 to 30,000 crore in the forthcoming year through the increase in customs and excise duties on diesel and petrol. On the other hand, the finance minister himself announced in his budget speech that Rs 26,000 crore worth of revenue will be lost during the same period due to the cut in income taxes. How come the prime minister is defending the indirect tax hike in the name of fiscal consolidation while turning a blind eye towards the direct tax cuts?
What comprises "populist policies"? Having low indirect taxes on fuel, which is consumed by an overwhelming majority of the people, or doling out corporate tax concessions worth Rs 80,000 crore in one single year (2009-10) in the name of stimulus?
The prime minister's assertion that the impact of the fuel price hike will lead to only 0.4 per cent rise in the wholesale price index is a gross miscalculation since it does not take into account the impact of high fuel prices on food prices. Food price inflation soared after the last hike in petro prices in July 2009. At a time when the people are reeling under nearly 20 per cent food price inflation, this round of fuel price hike will amount to a completely backbreaking burden.
The CPI(M) rejects the prime minister's callous defence of the fuel price hike and strongly reiterates its demand to withdraw the increase in customs and excise duties on diesel and petrol immediately.