The question of feasibility: At present, cumulative tax rate on petrol and diesel stands around 107 and 79 percent, which are much above the highest GST slab of 28 percent. This raises questions about feasibility of petrol and diesel under GST. A straightforward implementation of GST at 28 percent on fuel would result in a deep hit on the government revenue, which it cannot afford.
Way Forward
The inclusion of petroleum in GST will be a positive step considering the various benefits, which may accrue. The state government should support the initiative as Centre has already assured them of the compensation.
The focus of the state should be on improving tax base, efficiency and reducing the leakages under various schemes. This will ensure better revenue generation and minimizing the wastage of the resources.
Question
Rising petrol and diesel prices have reignited the debate over high taxes on fuels. In this light examine the pros and cons of bringing the petroleum products under the ambit of GST.
Strategic PSU Sales To Resume After 13 Years
In News
Background: In 2004 government privatized more than a dozen PSUs the most notable ones being IPCL which was sold to Reliance Industries and Bharat Aluminium Company and Hindustan Zinc both of which went to Vedanta Resources.
The government has drawn up ambitious plan for strategic sales (i.e. 51% of shares are owned by private sector) in 16 odd public sector undertakings (PSUs). And nine units including BEML, Pawan Hans, Bridge & Roof Company India and Hindustan Prefabs will be put for strategic sales in next few months.
The strategic disinvestment process would involve a three-stage process: Expression of interest to identify serious bidders, request for proposal and bids and completion.
For 2017-18, the government has set an ambitious disinvestment target of 72500 crore. It plans to raise 46500 crore from disinvestment in PSUs, 15000 crore from strategic disinvestment and 11000 crore from the listing of general insurers.
