Hike in excise duty to fund welfare schemes: Govt

Govt raised excise duty on petrol by Rs 2.25/litre, Re 1/litre on diesel

Hike in excise duty to fund welfare schemes: Govt

Justifying the hike in excise duty on petrol and diesel, government on Wednesday hit out at the Opposition over its criticism, saying the money would fund welfare schemes and not go into some people's pockets as it “did under the UPA regime”.

Petroleum Minister Dharmendra Pradhan said the BJP government inherited “empty coffers” besides revenue deficit of Rs 70,000 crore and the money it would mop by the hike in duty would help it run schemes meant for the poor.

"Should the government of India close down welfare schemes? Will they remain a lip service to people? The Centre has a lot of obligations for the common man and poor people. This money will go to the welfare schemes. They need drinking water, electricity and houses...," he said.

Replying to queries from reporters outside Parliament, he attacked Congress and other opposition parties over their objections to the hike and said it shows their "mental bankruptcy". Recalling the alleged scams during the UPA regime, he said unlike then when public money "would go into personal accounts", it would now help the people.

“They filled their pockets with the money of 2G and coal scams. Should not the poor get drinking water or electricity," he said, underscoring that government has reduced petrol price by over Rs 9 and diesel price by over Rs 6 since it came to power.

Opposition parties have slammed government over the second hike in excise duty instead of passing benefits of lower crude prices to consumers. Government expects to raise over Rs 10,000 crore of additional revenue in current fiscal by these hikes.

The government had on Tuesday raised excise duty on petrol by Rs 2.25 per litre and by Re 1 a litre on diesel but retail pump rates will not be increased as oil firms decided to absorb the duty change for the time being.

The second excise duty hike in three weeks will help raise an additional Rs 4,000 crore in four months to March as the government seeks to take advantage of a slump in global oil prices to shore up its revenues without stoking inflation.

Pradhan earlier said if international oil prices continue to slide, the benefit will certainly be passed on to consumers.

International crude prices were ruling at $107 per barrel when the NDA government came to power in May. It went up to $115-117 per barrel at the height of Iraq crisis but have since retreated to below $70, he said at an Assocham event here.

The slump led to petrol prices being cut seven times since August and diesel on three occasions in last one-and-half-months, he said.

Brent rates, the benchmark grade for more than half of the world's oil, have dropped to $68.34 a barrel, the lowest level since October 2009.

Pradhan said the government is committed to easing business environment so that manufacturing gets a boost and more jobs are created.

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