Petrol price reduction made immediate economic impact, says TN Finance Minister

Reducing the tax on petrol by ₹3 a litre would give relief to two crore two-wheeler riders, the Minister said, and added that the diesel subsidy for fishermen has also been increased

Finance Minister Palanivel Thiaga Rajan on Tuesday said the Tamil Nadu government had reduced the tax on petrol [by ₹3/litre] to create immediate an economic impact. The government had provided indirect incentives to provide relief for [sections of] diesel users as well, he told the TN Legislative Assembly.

Responding to AIADMK member Rajan Chellappa, who felt that reduction in the diesel price too would have provided succour to the poor, Mr. Rajan said the government would make further decisions after monitoring the sale of petrol and diesel in the last 30 days. He said the government brought down the petrol price since it was clear that it would give relief to two crore two-wheeler riders. “We held a discussion with the Chief Minister and decided to give not just relief, but increase the demand and spending powers. We wanted to give an economic stimulus,” he explained.

Pointing out that oil marketing companies would not share statistics about petrol and diesel users and the State government had to do its research, Mr. Rajan said farmers, fishermen, logistics companies and private vehicles were using diesel while high-end also cars depend on diesel. “Small cars run on petrol,” he said.

Mr. Rajan said the government had increased the diesel subsidy for fishermen and the for the Transport [Corporation] and had given six-month relief to bus operators from paying tax.

“Though a lot of trucks and lorries are operated on diesel, the government has apprehensions about whether a reduction in input cost would reach the last mile. But in the case of petrol, it was very clear that reduction in its price would benefit two crore bike riders,” he said.

As regards Mr. Chellappa’s claim that the erstwhile AIADMK government also had not increased taxes in the budget, he said though it had not increased the tax, it increased the tax on diesel and petrol twice.

“Sometimes we have to increase the tax. Late Chief Minister M.G. Ramachandran effected one per cent hike in sales tax to feed the children. If a government says that it has not increased tax and has not done anything, what is the need for a government? A good government should tax from the appropriate section at an appropriate time for the benefit of social and economic justice,” he said.

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