No cut in proposed cess on petrol, diesel in Kerala

There were strong speculations that the minister will reduce it to ₹1 but he made it clear that the state “cannot afford such a decision at this juncture”.

Amid the state-wide protest by opposition parties, Kerala finance minister K N Balagopal on Wednesday ruled out any cut in ₹2 cess on diesel and petrol announced in the state budget last week.

Police detain Youth Congress members during their protest over the Kerala budget, in Kochi. (PTI)

There were strong speculations that the minister will reduce it to ₹1 but he made it clear that the state “cannot afford such a decision at this juncture”. He also said the opposition was upset as “it cannot take credit” that it “forced the government to cut down” the cess now. The Congress-led opposition later staged a noisy walkout from the house.

In the state budget on Friday, Balagopal had proposed ₹2 cess on petrol and diesel to collect ₹750 crore additional revenue to fund welfare pension scheme.

He said that the government was firm to continue welfare pension so it needed additional revenue for this. “When the Union government hiked cess and tax, the opposition was silent. We have no plan to discontinue different welfare pensions. We need a seed fund to ensure this,” he said, adding, the opposition gave a wrong impression that the government will be forced to reduce it. He said every year the Union government collects ₹7,500 core through fuel cess and tax and asked the Opposition whether it was right on its part “to only criticise the state government”.

“Tax reforms are necessary for security of more than 60 lakh people and their development. The government introduced cess for a noble cause and opposition parties are giving a wrong impression that such a cess was introduced for the first time,” he said. But the opposition slammed the government saying “its arrogance was exposed yet again.”

“We don’t need any credit for lowering the burden imposed on common man. Let the government take it ... but they are not ready. Arrogance of chief minister (Pinarayi Vijayan) and his team has been exposed again. The government is penalising people for their financial mismanagement,” said opposition leader V D Satheesan after the walkout. He said that the opposition parties will strengthen their ongoing agitation against the cess. Four legislators of the United Democratic Front are also on fast outside the state assembly since Saturday.

“For all its wrong doings and splurge the state government targets the Centre and misleads people. We will expose them in the coming days,” said BJP leader S Suresh. Though some allies have expressed reservations over cess, the lead party (CPI(M) reportedly prevailed over them saying it was “necessary to move the government wheels”, people who are aware of the development said.

Besides petroleum products, the cash-strapped government had increased tax on new vehicles, liquor and hiked power and water charges, fair price value of land and upped government fees across the board to attract the much-needed revenue. Meanwhile, the state witnessed protests on Wednesday also and police baton-charged Congress workers in Kochi and Kottayam.