[Marxistindia] callous justification of petro price hike

[news from the cpi(m)]

March 03, 2010
Press Statement

The Polit Bureau of the Communist Party of India (Marxist) has issued the
following statement:

Callous Justification of Petro Price Hike

The Prime Minister’s justification of the hike in indirect taxes on diesel
and petrol in the Union Budget in terms of taking a “long-term view”
reflects a flawed economic thinking and insensitivity to the sufferings of
the people due to price rise.

Estimates suggest that the Government seeks to mobilise between Rs. 25000
to 30000 crore in the forthcoming year through the increase in customs and
excise duties on diesel and petrol. On the other hand, the Finance
Minister himself announced in his Budget speech that Rs. 26000 crore worth
of revenue will be lost during the same period due to the cut in income
taxes. How come the Prime Minister is defending the indirect tax hike in
the name of fiscal consolidation while turning a blind eye towards the
direct tax cuts?

What comprises “populist policies”? Having low indirect taxes on fuel,
which is consumed by an overwhelming majority of the people, or doling out
corporate tax concessions worth Rs. 80000 crore in one single year
(2009-10) in the name of stimulus?

The Prime Minister’s assertion that the impact of the fuel price hike will
lead to only 0.4% rise in the wholesale price index is a gross
miscalculation since it does not take into account the impact of high fuel
prices on food prices. Food price inflation soared after the last hike in
petro prices in July 2009. At a time when the people are reeling under
nearly 20% food price inflation, this round of fuel price hike will amount
to a completely back breaking burden.

The CPI (M) rejects the Prime Minister’s callous defence of the fuel price
hike and strongly reiterates its demand to withdraw the increase in
customs and excise duties on diesel and petrol immediately.