Patna, June 4: A day before Prime Minister Manmohan Singh offered his "explanation" regarding the oil price hike, Bihar's NDA government decided to modify the state tax so as to make the hike easy on the state people.
The Centre today hiked the prices of petrol, diesel and LPG by Rs 5, Rs 3 and Rs 50, respectively, but the Nitish Kumar-led cabinet decided yesterday evening to not "gain" from the expected hike.
This means that the state would forego the gain of Rs 1.35 and 60 paise as state tax for petrol and diesel, respectively.
The tax component for diesel and petrol would be 20 and 17 per cent respectively. State cabinet secretary Girish Shankar said: "We will now decide how to modify the state tax in such a way that the government does not stand to lose." Shankar said the cabinet had vested final powers with the chief minister to modify the tax stricture.
Of the Rs 1,600 crore annual earnings through taxes, petrol and diesel account for 27 per cent and 20 per cent respectively.
"The UPA government has always used soft option of hiking prices of all commodities, including petroleum. It remains to be seen if the Left reacts sharply to today's hike or is just content firing their usual paper bullets on the PM," said the Bihar chief minister.
He added that the Bihar government has been trying to provide economic relief to people within its own limitations.
Political analysts and industry experts have lauded the government's moves during time of inflation. A senior JD(U) leader called the NDA government move a "people-friendly" decision.
He conceded that the government decision would have a far-reaching political implication in NDA's favour, especially after the recent success of the BJP in Karntaka — a win based on the "inflation plank" as well. "We want to carry this momentum in our favour till the next general elections," said the leader.
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Ranjan Rituraj Sinh , NOIDA
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