Kerala govt rejects demand to forego fuel tax; UDF terms it 'tax terrorism'

Thiruvananthapuram: The Kerala Assembly on Tuesday witnessed intense war of words between the CPI(M)-led ruling front and the Congress-headed opposition over frequent fuel price hike in the country and the latter walked out of the House terming it as 'state-sponsored tax terrorism'.

Though the LDF government maintained that it was the Centre and not the state government was responsible for the fuel price hike, the UDF members wanted it to forego the additional tax revenue generated on its sales for the sake of struggling commoners.

Rejecting the opposition demand, Finance Minister K N Balagopal said the southern state was facing a sharp decline in tax and non-tax revenues due to the COVID situation prevailing in the country and even the borrowing freedom of the state was limited by the existing law.

Giving a detailed account of the state's grim economy, he said the government had to earmark over Rs 900 crore per month for the social security pensions alone.

An additional Rs 14,500 crore was required as part of the recent revision of the salary and pension of the government employees and retired hands, he said.

"In the wake of the COVID-19, it is certain that a more whopping amount should be found out to meet the expense. In this circumstance, reducing the state tax (on fuel) will aggravate the crisis," Balagopal said.

Instead, a central policy of imposing a huge increase in the petrol and diesel taxes in a short period of time must change, he said.

The minister also wanted all parties to stand united across political lines against the central policy which imposes the so-called heavy burden on common people during the time of COVID spread.

Noting that the state government does not have the authority to fix the petrol and diesel prices, Balagopal, who was also a former Rajya Sabha MP, said the UPA and NDA governments at the Centre had left it to the market to decide.

"This surge in price has been going on ever since then," he said.

He claimed that Kerala was one of the few states that did not increase fuel tax despite COVID crisis when it was increased by many other states in the country.

Rejecting the Finance Minister's arguments, Shafi Parambil (Congress), who sought notice for the adjournment motion, said the reason for the increase in fuel price was not just the companies being given pricing power but the 'tax terrorism' imposed by the state and union governments.

It is the government and not the companies who are behind the frequent price hike, the legislator alleged.

Accusing the BJP-NDA government at the Centre on the issue, he said of course the government which rules the country was the first culprit.

Backing his arguments, Leader of Opposition in the Assembly V D Satheesan said the frequent fuel price hike was nothing but 'tax terrorism' and both the union and state governments were viewing it as the best method to fill the exchequer.

The opposition later staged a walkout in the House as Speaker M B Rajesh rejected leave for the motion.