PM Modi flags higher fuel price in Opposition-ruled States, seeks reduction in VAT

PM Modi said the Centre had reduced excise duties on petrol and diesel in November to reduce the price burden on people

Flagging higher fuel prices in many Opposition-ruled States, Prime Minister Narendra Modi on Wednesday urged them to reduce VAT in the "national interest" to benefit the common man and work in the spirit of cooperative federalism in this time of global crisis.

Mr. Modi raised the issue of many States not adhering to the Centre's call for reducing the Value Added Tax (VAT) on petrol and diesel after his government slashed excise duties on them in November last, and called it an "injustice" to people living there and also harmful for neighbouring States.

The Prime Minister focussed a big part of his concluding remarks in his meeting with chief ministers to review the COVID-19 situation on the issue of fuel price, whose rise has been a matter of public debate and a cause behind the surge in inflation.

Boosting cooperative federalism is necessary for strengthening the Indian economy in the global scenario impacted by war, he said, in an apparent reference to the Russian attack on Ukraine, and called for better Centre-States coordination in economic decisions.

Supply chain has been impacted and challenges have been rising, he added.

Mr. Modi said the Centre had reduced excise duties on petrol and diesel in November to reduce its price burden on people. It had also urged to reduce VAT, which is imposed by States, and transfer the benefits to people, he noted, adding some States did and some did not.

It was mostly the BJP-run States which slashed VAT by different margins, taking the cue from the Centre. Most Opposition-ruled States did not, while the Aam Aadmi Party government in Delhi did it much later.