Recently there was news of recent increase in fuel prices across the country. And I tried to search what is the amount of tax, State Government levies on petroleum products. According to an estimate, around 30-40% of any state revenues comes from taxation from fuel. The central government has little control over the state taxes. Basically the central government is funding the states government in form of taxes and subsidies. I found a very good article on Value Research by Sanjay Kumar Singh. The whole article can be found at http://www.valueresearchonline.com/story/h2_storyView.asp?str=16965. Few of the excerpts from the article is given below.
India should end giving subsidies because of
1) Fiscal Consolidation. Because of high prices and high export volume of petroleum, it would be difficult to control the fiscal deficit
2) Encourage Conservation practices: High fuel prices give a phillip to usage of alternate fuels.
3) Subsidy is a cost borne by everyone. Even the companies are not happy as the subsidy don't come in time. There is a lag in subsidy payment and payment for fuel.
Read the whole article and you will come to know about the harms the current fuel subsidies are doing to us. What are your views on this.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment