CNG switch fall-out on revenue

By Our Staff Reporter

NEW DELHI, AUG. 23.

The continued drop in consumption of diesel and related petroleum products due to hastened pace of commercial and private vehicles switching to eco-friendly CNG fuel is expected to have a cascading effect on revenue collections of the Delhi Government which is already reeling under a Rs.300-crore-cut in Central assistance.

The sales tax on petroleum products contributes around 25 per cent of the total revenue of the Delhi Government which was over Rs. 3,400 crores last year. The effects of increasing use of CNG are already showing as official figures indicate that the revenue had gone down by almost 16 per cent. Last year, the total sales tax collections from petroleum products was Rs. 800 crores. This is expected to fall short by around Rs. 140 crores this year.

Confirming the declining trend, the Delhi Finance Minister, Mr. Mahinder Singh Saathi, said it was worrisome and the government had to think about the welfare of the state and ensure that the development works do not suffer. The Delhi Government, he said, was still fighting out with the Centre over the cut in Central assistance to the tune of Rs. 300 crores and could ill-afford to lose more than Rs. 150 crores.

Ruling out imposition of sales tax on CNG fuel, Mr. Saathi said the authorities were still studying various aspects and also ways and means of increasing the revenue. But this situation cannot be allowed to continue as petroleum products contribute a big chunk of revenue. He pointed out that even the Union Petroleum Minister, Mr. Ram Naik, had indicated that the CNG fuel prices are expected to be increased. ``It might be a clean fuel and we are not discouraging its use. But then, it is a major source of revenue for the State. At some point, the sales tax would have to be imposed. We cannot burden other sectors to subsidise CNG as is being suggested. They are only concerned about one issue while I have to take care of the entire State,'' he remarked.

Mr. Saathi was also critical of the Centre for Science and Environment for rushing to the media on the imposition of sales tax issue without ascertaining the true facts. They did not think it appropriate to find out from the Delhi Government what the actual proposal is and if at all it is in the pipeline. ``They are not the sole protectors of the environment. It is the effort of the Delhi Government and its initiatives which have resulted in pollution levels going down in the Capital. They cannot take a one-sided view and then go on blowing up things which have no basis,'' he added.

Mr. Saathi also lashed out at the Leader of the Opposition, Prof. Jagdish Mukhi, for making baseless allegations on stamp duty hike. The Minister informed that the stamp duty was increased after carrying out a thorough study of the rates in other metros. ``The stamp duty in Delhi is still one per cent lower than any other metro city. Prof. Mukhi has, perhaps, not checked his facts properly otherwise he would not have made such a baseless statement. We are expecting an increase of Rs. 100 crores in the revenue collections from the increase. Only time will tell who is right. But I am sure the prophets of doom would be proved wrong in the end,'' he stated.

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