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Price blow to aam aadmi

Fresh taxes impose more burden on household budget from today
Last Updated 01 April 2010, 04:00 IST
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On top of the inflation-inducing list of items is auto fuel. Over and above, the substantial hike in the retail prices of petrol and diesel effected soon after Union Finance Minister Pranab Mukherjee’s budget on February 26, the prices of the two essential items go up further from Thursday in 13 big cities across the country.

In Bangalore, the revised price of petrol is Rs 54.26, up by 55 paise, and of diesel Rs 40.15, up by 28 paise. The revision is in view of the shift from Euro-III fuel to Euro-IV compliant fuel standards.

By October, people across the country will be paying more for petrol and diesel as there would be a transition from the existing Euro-II to Euro-III compliant fuel standards. In Goa, this shift takes place from Thursday, which also pushes up the fuel prices in that state.

The exact quantum of hike in retail prices of petrol and diesel complied with Euro-IV standard in the designated 13 cities will differ from city to city depending upon local taxes. As per fuel specifications committed to the Supreme Court, oil firms are to sell petrol and diesel meeting the stringent Euro-IV specifications in 13 major cities from April 1 while Euro-III grade fuel is to be supplied in rest of the country. These 13 cities include four metro cities— Delhi, Mumbai, Chennai, Kolkata— Hyderabad, Bangalore, Lucknow, Kanpur, Agra, Surat, Ahmedabad, Pune and Sholapur.

Highway toll
Travel along tolled national highways across the country becomes still more expensive. From Thursday, the National Highway Authority of India’s revised toll rates come into force. For cars, the toll goes up from the existing 71 paise to 76 paise per km. For other vehicles, the increase ranges from 6 paise to 11 paise per km. The increase is linked to the wholesale price index.

The exact toll amount to be paid by motorists will be a rounded-off figure close to Rs 5 denomination. For instance, if one covers 50 km of toll road, he has to pay Rs 40 against the earlier rate of Rs 35, an NHAI official told Deccan Herald in the national capital. By October, the tolls for other tolled-roads, too, would be revised upwardly, according to the official.

The new toll rate was fixed based on the increase in the wholesale price index (WPI) which is around 9.59 in February. The revised rates are immediately applicable to 24 national highways and rest of the roads will be covered on phased manner.

Consumer items
The price of almost every consumer product, too, is set to move northwards due to the combined effect of the two budgets. These include cars, cement, steel, refrigerators, air conditioners and television. Not surprisingly, in Bangalore City the month of March saw a big 30 per cent jump in car sales as buyers sought to escape paying higher Central excise, the state’s increased value added tax and the revised registration costs.

Consumers in the state have to shell out Re 1 more on every Rs 100 purchase as additional VAT burden. The hike in VAT was part of the State government’s 2010-11 budget proposals according to which the slabs were increased from 12.5 per cent to 13.5 per cent and from 4 per cent to 5 per cent.

Hotel room tariffs too go up as the state budget has increased the luxury tax rate from 6 per cent to 8 per cent for rooms whose tariffs range between Rs 1,000 and Rs 2,000, and from 10 to 12 per cent for rooms with a daily rent of over Rs 2,000.

Though Mukherjee had contended that his budget proposals would push up the rate of inflation only to the tune of 0.41 per cent, for consumers the impact is likely to be higher. In February, despite government assurances to the contrary, the inflation rate threatened to cross the double-digit figure. It stood at 9.59 per cent.

This figure may move up further in view of the fuel price hikes in the budget late in February.

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(Published 31 March 2010, 19:10 IST)

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