Jagan govt hikes petrol, diesel prices again!

[Anta Assamey]

With the Andhra Pradesh state exchequer coming under severe stress due to sharp drop in revenues on account of Covid-19 pandemic situation, the Y S Jagan Mohan Reddy government is now forced to impose additional burden of Rs 500 crore on consumers of diesel and petrol.

An ordinance to this effect was issued by the state government on Friday, amending the APVAT Act, 2005, providing for levy and collection of Road Development Cess of one rupee per litre on petrol and diesel.

According to Rajat Bhargava, special chief secretary (revenue), the economic activity had come to a halt in the state ever since lockdown was imposed in the state due to Covid-19 pandemic, seriously affecting the revenues of the State during the months of April, May, June and July 2020. 

In April, 2020, the revenue realised in the State was only Rs 1323 crore as against Rs 4,480 crore in April 2019 which accounts for only 29.5% of the total expected revenue. Similar trends were observed for the months of May and June, July and August, 2020 also, he said.

Besides the fall in revenues, the Government of India has also not released the GST compensation for the year 2020-21 so far.

While the stress on revenues from all sources continued, there is steep increase in the expenditure relating to the health services for combating Covid-19 pandemic.

Furthermore, the government is also implementing several schemes for the welfare of people from downtrodden sections. 

The twin impact of fall in revenues and enhanced expenditure on health services and welfare schemes has impacted the capital expenditure on infrastructure development. 

Taking all the factors into consideration and keeping in view the necessity of allocating dedicated funds to the road development in the state, the state government has decided to levy “Road Development Cess” of Re 1 per litre on petrol and diesel in addition to the existing levies on the two products in public interest, Rajat Bhargava said.

“The proceeds of the Road Development Cess which will be around Rs 500 crore per annum shall be transferred to the Andhra Pradesh Road Development Corporation for exclusive use in developing road infrastructure,” the official said.