Montek for cut in taxes on petrol, diesel

Priyadarshi Siddhanta & Chandra Shekhar
New Delhi, Feb 25 (PTI)

Days before the Budget, Planning Commission Deputy Chairman Montek Singh Ahluwalia today made out a strong case for cut in taxes on petrol and diesel, while indicating there would be a substantial increase in social sector allocations.

"We have said in the Integrated Energy policy...Please decide on a rational tax policy and once you have a rational tax policy in place, on a medium term basis, under-recoveries of petroleum companies are not feasible," he told PTI.

He said the consumers would have to bear the burden of the increasing crude oil prices.

"I think the consumer will ultimately have to bear the burden otherwise you kill your oil companies and I don't think the government wants to do that," Ahluwalia said, adding that he did not anticipate any easing of prices in the short run.

"So we have to live with the oil prices we have got," he said. World oil prices rose again to near USD 100 a barrel in Asian trade today.

The government decided this month to partly pass on the burden to the consumer by raising petrol prices by Rs 2 and diesel prices by Re 1 per litre.

Asked whether he expected a higher allocation for the social sectors in the Budget, to be unveiled later this week, Ahluwalia said "Increase definitely. I am very happy you will find Plan (Annual) shows substantial increase especially in the social sectors." The Annual Plan for the central ministries form part of the expenditure of the government reflected in the Budget. PTI