Jaitley had said on Tuesday that the Centre wanted to bring petroleum under the ambit of GST
and was awaiting responses from states. On why the Centre has not cut the excise duty on petroleum further, he said the government did so when crude oil prices went up. “We asked states to reduce taxes on petroleum. All NDA-ruled states did so but the UPA-ruled states refused to,” he said.
He said the excise duty on petroleum was used to fund higher allocation to infrastructure, including highways. “Who will pay for highways, if not those driving vehicles?” he asked.
The finance minister wondered why some states were saying their revenues under GST
had gone down, when they were assured constitutionally of protection regarding 14 per cent growth in their tax receipts on the base of 2015-16. Taking on Congress president Rahul Gandhi for calling GST a ‘Gabbar Singh Tax’ (the reference is to a dacoit) he said the total incidence of earlier taxes came to 31-31.5 percent, if cascading was also considered. The peak rate of GST is 28 per cent, reduced to 18 per cent on most items.
Jaitley reiterated the aim of reining in the Centre’s fiscal deficit at 3.2 per cent of the country’s gross domestic product (GDP) for the current financial year, ending March 31. The deficit had reached 96 per cent of the Budget Estimate for the full year in the first seven months, primarily because of expenditure frontloading.
“The idea is that the glide path of the fiscal deficit should always be maintained, so that our borrowing keeps coming down,” he said. He said the country’s economy was growing at an annual seven to eight per cent, a new normal, and inflation was under control.
On the contentious Financial Resolution and Depositors Insurance Bill, he assured that the money of all depositors in public sector banks would be protected. “We need not create any fear of psychosis. When the Bill comes before the joint committee, please discuss this. There is a 2011 G-20 commitment, when the UPA was in power (that led to the legislation), an offtake of the 2008 global crisis,” he said.