The decision of the Goa government to hike the VAT on fuel by two percentage points and the VAT on diesel by one percentage point is puzzling coming as it does when the citizens are reeling under unprecedented fuel rates and have to literally pay through their nose to fill up.
A buyer will now pay 27% VAT on petrol up from 25% VAT while the VAT on diesel has been hiked from 22% to 23%. As a result the price of petrol will go up by Rs 1.30 and diesel by 60 paisa effective midnight.
At a time when demands are growing louder for the government to cut the taxes on fuel as they have begun to spiral out of control Sawant comes across as completely oblivious and unheeding of these voices.
This is a far cry from the days when VAT on fuel was only 12.5% and yet Manohar Parrikar sold the story that it was too burdensome on the citizens priming to reduce it to only a nominal amount if voted to power. And voted to power he was, with a commanding majority and he didn’t disappoint on his promise. That of course is history. Those days are long past. The ruling BJP no longer even pretends that it is worried about the burden of inflation on the state’s residents.
Armed with the knowledge that people will vote for his party no matter what (and even if they don’t they can always buy MLAs) the Goa Chief Minister has cloaked himself with an aura of invincibility. His hunch is not entirely misplaced. If the citizens of the state do not exercise the power of the ballot to withdraw their confidence in a government that keeps taking decisions that harm the populace at large, leaders begin to believe that they can get away with anything.
Strong and unaccountable governments typically lead to unparalleled losses for the citizens who lose the ability and the power to force the government’s hand away from damaging moves.
Over the last decade or so the common citizen has entirely lost the power to force the government to reduce fuel prices, reverse decisions on crucial issues, the IIT at Melaulim being an exception and have typically ended up paying a heavy price for electing strong governments -- in the case of fuels we are paying the price quite literally directly from our wallets.
But Sawant’s decision is also an indicator of another troubling fact: the state of the State’s finances. Coming as it does shortly before Sawant is to present his budget, these hikes are the clearest indicator yet that the GST has completely failed small states like Goa who have traded off their ability to levy and decide the quantum of taxes and have got nothing in return, despite tall promises to the contrary by none other than Manohar Parrikar.
The State has never been able to generate revenue quite like the pre-GST days despite it now being more than five years that GST has been implemented. In the absence of any other power in the hands of the State the State governments are forced to hike the rates of excise and VAT on fuel the only two taxes they continue to have control over and these two now bear the brunt of the State government’s urgency to hike revenue collections. Excise duties were hiked last year and VAT on fuel has grown continuously to where it is now.
It’s time the BJP learns to address the elephant in the room and admit to have failed rather than heaping more and more misery on the common citizen.
