Chief Ministers of Telugu states offer incongruent explanations to defend non-reduction of fuel prices

The following article was written for MyInd Makers. Pasting it here for reference.

 After the Modi government’s landmark move to reduce petrol price by Rs.5/- and diesel by Rs. 10/- last week, the states ruled by BJP also reduced the prices on the same day. Odisha followed suit in a couple of days. Punjab was the only Congress ruled state that reduced the prices in their states too, because they definitely cannot brazen it out like the other non-BJP states because of the impending elections in Punjab.

I kept on wondering what can be the gameplan of the opposition parties that are brazening this out. The responses of the Chief Minister of the telugu states – Telangana and Andhra Pradesh – gave a great insight into the thinking of the opposition parties.

The Andhra Pradesh Chief Minister, Jagan Mohan Reddy, put out a full-page ad in many newspapers! He put out two tables and a lot of text to explain his side of the story. The two tables hid more information than revealing anything new!

In the first table, Jagan Mohan Reddy split the “nature of tax” imposed by the central government on petrol and diesel – Excise Duty, Special Additional Excise Duty, Additional Excise Duty (Road and Development Cess), and Other Taxes (Cess, Surcharges). State governments are eligible to get 41% of collected tax only on the “Excise Duty” aspect of it.

According to this table, the central government collecting a total of 3,35,000 crores and the state’s share is 19,475 crores out of this.

The table does not tell us the time frame under which this amount is calculated. Is this from the time Jagan came into power (2019)? Is this for the last year? Is this for the last 7 years since Modi came into power? We are left clueless on this. The table also doesn’t tell us if this is the amount collected only from Andhra Pradesh or from the entire country. Even the text accompanying this unique table doesn’t answer these questions. Instead, the text raises more questions! Here is one such claim from the ad as below!

The international crude oil prices have definitely not come down drastically from May 2019 (~$57) to November 2021 (~$83)! It is appalling indeed how Jagan thought he can get away with peddling such blatant lies in a front-page ad.

In the second table, Jagan exhibits even higher intelligence than the first one! He only gives details on the percentage of taxes levied by the state government but does not give us the exact amount the state government has earned from this!

If the first table talks about the exact amount earned by the central government, then shouldn’t the second table talk about the exact amount earned by the state government too? Jagan claims that all he did was to raise the already existing VAT and surcharge by only 1 rupee, thereby implying that it is totally wrong to ask him to reduce the fuel prices in Andhra Pradesh.

A similar argument was put forth by the Telangana Chief Minister, in his press conference on 7th November. He emphatically claimed that he has never increased the VAT on fuel prices ever since he came to power. In his characteristic style, he thundered that he didn’t increase even a single paisa in his 7 years in power. Unfortunately, the press doesn’t get a chance to question KCR vehemently. Otherwise, someone would have pointed out to him that his government did increase VAT from 31% to ~35% on petrol; from 22% to ~27% on diesel in the year 2015! By KCR’s own logic, he should therefore bring this VAT down to lesser levels!

Both CMs have claimed that the centre has made a lot of money from the cess/surcharge but both of them did not tell how much money the state governments have made from the VAT they have imposed! How can they claim that the state can earn 35% from taxes on petrol to run the state but the central government should not earn for running the country? Why does KCR assume that it is the absolute right of the central government to distribute 41% of everything they earn to the states?

Jagan Mohan Reddy went a step ahead and wrote in his advertisement that he spent the money on repairing roads in the state. With that logic, it is then entirely justified that the centre also levies these taxes because it also has completed a lot of infrastructure projects in the country!

This confused response of the opposition is simply amusing to hear. The responses of the Chief Ministers of the telugu states summarizes the confusion that the opposition is in, right now. Any reduction on their front will be a dent to the revenues to the state coffer; any reduction will also be seen as following the footsteps of the BJP which they don’t want to do – even at the cost of burdening the public!

The icing on the cake is this ad by the Punjab government today – cites the high prices in Rajasthan that is also governed by the Congress party!!