M A I N   N E W S

Excise on petrol, diesel may go up

New Delhi, January 9
The government is likely to increase excise duty on petrol and diesel by more than 100 per cent soon to mop up an additional Rs 2,000 crore during January-March 2002, but the burden will not be passed on to consumers. The government move is aimed at taking advantage of subdued international oil prices to below $ 20 a barrel which at the present rate is leading to accrual of about Rs 1000 crore in the oil pool account, official sources said. The oil pool deficit, which stands at Rs 9,000 crore now, could increase to Rs 12,000 crore by the end of March 2002, a level that was witnessed prior to the September 2001 downtrend in the global oil prices.

The move will finally prove to be revenue neutral for the oil pool account as ministers of petroleum and finance have already announced that oil companies will be given tax free bonds for their outstanding at the end of the year. At present, excise duty of 32 per cent is being levied on petrol while diesel attracts 16 per cent duty. Although Petroleum Ministry has not yet received a proposal, officials are understood to be working on the presumption of duty hike on petrol and diesel, which are as such priced above the import parity, before these fuels are freed of price controls from April 1, 2002.

Earlier, Finance Ministry sources said: “We will like to mop up Rs 1,500-2000 crore during the remaining part of the current fiscal by raising duties.”

However, Revenue Secretary S. Narayan declined to comment when asked about the government’s proposed move of raising the duty rate following Cabinet’s decision to bestow Finance Minister Yaswant Sinha with emergency powers to increase excise duty without waiting for the Budget 2002-03.

At present, excise duty on kerosene and LPG is 8 per cent each while that on diesel is 16 per cent. Excise duty on petrol currently is 32 per cent.

While oil companies will pay the increased excise duty, the same will not be charged from the consumers, sources said adding the loss, if any, to the oil company will be credited to their outstanding with the Oil Pool Account.

The Oil Pool Account is a complex mechanism of subsidising mass consumed kerosene and cooking gas (LPG).

At the time of preparing the Budget for the current fiscal, the government had factored crude oil prices for the year at an average of $ 24-25 a barrel and the oil pool deficit estimated according to that.

“Now with prices falling, the excise duty hike will mostly be negated,” they added. PTI

Vajpayee to call meeting of CMs before Budget

New Delhi, January 9
Prime Minister Atal Behari Vajpayee will convene a meeting of Chief Ministers before the Budget session of Parliament in a bid to evolve a consensus on several contentious issues such as the urban land ceiling, Model Rent Control Act and stamp duty, Urban Development Minister Ananth Kumar said today.

Inaugurating a seminar here on “Municipal accounting reforms”, the minister said the reforms would also find a place in the agenda of the meeting.

He suggested enhanced transparency, better financial management and reassessment of proper tax structure and modernisation of accounting system for efficient delivery of civic services by the urban local governments.

Stating that the single entry cash based accounting system used by most of the urban local bodies today was subject to a number of defects as the accuracy of account books could be verified, Mr Ananth Kumar advocated the need for adopting a double accrual-based system which would enable the preparation of reliable, detailed financial statements subject to checks and balances.

A crucial concern for the government was to ensure that corporate governance did not lead to the dilution of social responsibility and exclusion of the poor and vulnerable sections from the formal delivery system of local bodies, he said, adding social responsibility coupled with corporate governance is the requirement of the day. PTI