Under political pressure from all quarters, state finance minister Ajit Pawar is likely to roll back the 5% value added tax on cooking gas he had proposed in the budget presented on Monday.
On Tuesday, Congress legislators led by state unit president Manikrao Thakre met Chief Minister Prithviraj Chavan and demanded the tax be rolled back. “The tax affects the aam admi. We have requested the CM to review and withdraw it,” said Thakre. The delegation said legislators would protest the hike on the floor of the Houses during the debate on the budget.
Not wanting to be targeted as the culprit, the Nationalist Congress Party (NCP) also got its legislators to demand a rollback. Shashikant Shinde, an NCP MLA known to be close to Pawar, said: “All NCP legislators had a meeting and we all feel the LPG hike will pinch the common man. We are requesting the finance minister to review his decision.”
The tax would have raised the cost of a cylinder by approximately Rs 20, and earned revenue to the tune of Rs 200 to Rs 250 crore. Other than the hike in the motor vehicles tax, it was to be the key contributor to the state kitty.
Sources in the NCP said that instead of letting the Congress take credit for the rollback, the NCP had decided to join the protests. “This kind of hike affects the common man and can go against us as all political parties are opposing it. Pawar is willing to partially roll back the hike,” said a senior NCP functionary, on condition of anonymity.
Government sources said the CM and Pawar are considering a partial rollback by reducing the tax to 2%, but it’s just as likely that the state will scrap it completely. “If the hike is not going to add a substantial amount of money to our coffers, what is the point of a partial rollback,” said a Congress minister, requesting anonymity.
Shiv Sena executive party president Uddhav Thackeray, who also met Chavan, said: “Our party will go on a protest march if the decision is not withdrawn.”
A senior official said the rollback could be absorbed. On the whole, the revenue from sales tax in the state stands at Rs 62,000 crore.