A day after Prime Minister Narendra Modi urged the Opposition–ruled States to reduce Value Added Tax (VAT) on petrol and diesel, the Congress on Thursday targeted Mr. Modi for his comments, with former Congress chief Rahul Gandhi alleging that his government follows “coercive federalism”.
Taking to Twitter, Mr. Gandhi said, “High fuel prices — blame States. Coal shortage — blame States. Oxygen shortage — blame States. 68% of all fuel taxes are taken by the Centre. Yet, the PM abdicates responsibility. Modi’s federalism is not cooperative. It’s coercive.”
In a Facebook post, he said, “It is coercive federalism which is shamelessly selective in nature against Opposition–ruled States. India needs a PM who treats States as equal partners. Not as adversaries.”
Former Finance Minister P. Chidambaram tweeted, “On the day the PM exhorted States to cut the VAT rate on petrol and diesel, the MoF announced that the Centre owes ₹78,704 crore to the States!”
At a press conference, Rajya Sabha member Abhishek Singhvi said the Centre had earned ₹27-29 lakh crore on fuel taxes and cess in the past eight years but the States have got very little.
“You don’t give several States their grants....you don’t give that. On the other hand, the poor State is scrounging for a little bit of money by the VAT. You are saying — you close the VAT or reduce the VAT, I will not touch my 27 lakh crore. Is this not insulting your intelligence?” asked Mr. Singhvi.
