Petrol & diesel price hikes to pour Rs 700 crore into Maharashtra govt coffers

MUMBAI: Even as the common man is at the receiving end, the daily hike in petroleum prices is helping the cashstrapped Maharashtra government by adding nearly Rs 700 crore to state exchequer as value-added tax (VAT).
A senior official said every Re 1 increase in petrol and diesel prices give the state additional VAT of Rs 140 crore and Rs 275 crore, respectively, annually. “In view of consecutive hikes in petrol and diesel rates, we expect to add nearly Rs 700 crore to the state exchequer. Annually, we receive Rs 9,100 crore as VAT on petrol and Rs 16,000 crore on diesel,” he added.
Expressing concern over the deteriorating financial situation, the official said that even after imposing a 63% cut on the state budget to mobilize Rs 70,000 crore, the situation is still bad.
It was expected that the Maharashtra government would receive funds from stamp duty and registration and excise duty on liquor.
Last year, the state revenue department had surpassed the target on stamp duty and registration—against the Rs 28,000 crore target, it had mobilized Rs 28,989 crore, nearly 104% more than the target. But in April and May this year, only Rs 789 crore has been mobilized.
Even on excise duty on liquor, the main source of income for Maharashtra government, against the average monthly target of Rs 1,300 crore, it garnered Rs 2,97 crore in April, Rs 581 crore in May and is expected to mobilize Rs 600 crore in June.
“Last year, we had achieved the target, now it appears to be difficult to reach the target of Rs 19,225 crore,” the senior official said.