FM refuses to budge on fuel price hike

Pranab hopeful of a solution

“There will be no rollback of tax proposals (on petroleum products). If I had to roll back, I would not have gone for this at all. There seems to be some problem, (over the issue) but we will over come this,” he told Deccan Herald.

Some of the key allies of the ruling Congress-led UPA government like the DMK and the Trinamool Congress have demanded rollback of the hike in duties on petroleum products which triggered the rise in prices of petrol and diesel.

Also, as soon as Mukherjee proposed the hike in duties of petroleum products, the entire Opposition, comprising the BJP as well as the Left parties, walked out of the Lok Sabha.
The BJP has already threatened cut motions against the budget proposal. Asked if the Congress’ allies would join the Opposition for the cut motion and the choice before the government, Mukherjee shot back: “In that case, the Budget will collapse. The Finance Bill will collapse. It would mean the government will fall…Nobody wants this (type of situation to happen).”

But after a pause, Mukherjee said: “In a democratic set-up, there is always a mechanism to resolve the problem...Our allies will finally understand under what circumstances we have taken this measure (of hiking duty on petroleum products).”

Explaining the rationale behind the duty hike, he said: “Last year, we faced a difficult time because of the global slowdown. We had to give out duty concessions to help the economy back to the growth path. Now there is recovery in the economy.”

Pointing out that the task  now was to “put the economy on the path of fiscal consolidation”, Mukherjee said there was need for expansion in revenue collection. “That is one of the reasons why we went for some duty hike.”

Asked how the government would implement the Kirit Parikh Panel recommending deregulation of petro prices, he said: “One should not mix up the issues. The report has been submitted and it is being studied. The government will firm up its view in a democratic manner.”

When pointed out that in his I-T proposals, he was quite generous towards the middle class with no concern for the lower income group, he said: “This is not true. The exemption limit stands at Rs 1,60,000. If you calculate overall tax savings instruments, which has now gone up to Rs 1,20,000, the total income exempted from tax net stands at Rs 2,80,000. Roughly one can say a monthly income up to near about Rs 25,000 is not taxed. When you raise the I-T slabs people staying little above the border line sometimes get some benefit.”