As fuel prices skyrocket, PM Modi asks Non-BJP states to reduce VAT


Prime Minister Narendra Modi on Wednesday said that some Opposition-ruled states have not passed the benefits of Centre’s excise duty cut to the people resulting in fuel prices to be too high.

“These States should bring in immediate remedial measures to stop this injustice,” Modi said while interacting with Chief Ministers to discuss the emerging COVID-19 situation.

 “This harms the neighbouring States also. States like Karnataka and Gujarat undertook the tax reduction for the welfare of the people despite revenue loss while their neighbouring States earned revenue by not reducing tax,” he said.

The Prime Minister said that a request was made last November to reduce VAT, but many states, most of which are non-BJP-ruled ones like Maharashtra, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu, Kerala and Jharkhand, did not do so for some reason.

He appealed to states to ensure Centre-State cooperation while also stating that this is the need of the hour.

The Prime Minister said that along with the pandemic-related challenges, the global community and the common man are facing the fallout of a war. “Because of the war situation the global community is under stress while the rising cases of COVID–19 is also causing a disruption in the supply chain,” the PM said in an apparent reference to the Russia–Ukraine conflict.

“In the current global scenario, for the strength of India’s economy, coordination between the Centre and States in economic decisions is necessary. In the conditions imposed by global events, this spirit of cooperative federalism becomes important,” he said in the context of fuel prices.

The Prime Minister said that in an effort to reduce the fuel prices, the Central government has reduced the excise duty and had requested the States also to do so. Some States reduced taxes but some did not pass on the benefits to the people, leading to higher fuel prices there.