Economy

Centre and States need to talk on fuel prices: Finance Minister

Our Bureau Ahmedabad | Updated on February 25, 2021

Nirmala Sitharaman, Finance Minister (file photo)

On disinvestment, FM says, no intent to shut down PSUs

As the fuel prices are increasing, the Union Finance Minister Nirmala Sitharaman on Thursday expressed the need for the Centre and the States to talk about reducing the taxes on fuels to ease the burden on consumers.

Addressing an interactive session under IIM-Ahmedabad & JSW School of Public Policy lecture, Sitharaman called it a major dilemma for the Centre to commit a timeframe to bring down taxes on the auto fuels, i.e. petrol and diesel.

“It is not just the cess, (but) you have an excise duty of the Centre (and) then you have VAT of certain percentage by the States. We can bicker about who earns more. But there is a revenue consideration for both, Centre and the States,” she said, responding to a question on when the Centre is likely to reduce the cess on the fuels.

“I strongly believe it’s no longer competitive. If the end consumer should pay less, and I agree the burden should be less on them, it is no longer a competition between Centre and states,” the Finance Minister stated.

“If eventually, we want the consumer not to be bearing so much of burden, it is the Centre and states that should be talking on this. Yes, I concede, that is where the action has to be and both the Centre and the States need to talk. Let’s see what we can do about it,” Sitharaman said.

Earlier in the day, the Finance Minister had interacted with the trade, businessmen, representatives of chambers of commerce and tax professionals from Gujarat in a post-budget discussion.

In her address to the business stakeholders, Sitharaman stated that the Government’s intent was not to shut down the public sector units but it wanted the private sector to infuse more capital and bring efficiency in their operations. “The inefficiently-run PSUs which couldn’t be run by the Government and still there is tax payers’ money being poured into it to keep it alive. How long can it go on?”

“The Government’s intention is not to shut down the PSUs. The Government’s intention is to make them run with more capital and more efficiency. If it can be done with the private sector, why not,” she said adding that public good can also be taken care by public themselves.

The Government will protect the interests of employees and organisations. “We trust (private) businesses and cannot keep pumping taxpayers’ money into PSUs,” she said.

On the banking sector’s reforms and disinvestments, the Finance Minister also informed that the Government wanted banks to run professionally.

“We want banks to be more nimble and move faster to take decisions. We want India’s banks to be big enough and scale up to meet with the demands of our growing economy. Can they meet the aspirations and big dreams of our young India? We need big banks,” she said.

Published on February 25, 2021

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