New Delhi :Justifying the hike in excise duty on petrol and diesel, Finance Minister Arun Jaitley today said for the first time fiscal deficit target will be met without budgetary cuts, as Opposition charged the government with “profiteering” from the fall in global oil prices.
“This will happen for first time, we will achieve fiscal deficit (target) without fiscal cuts,” he said in Rajya Sabha, during Zero Hour on the Opposition criticism over government’s decision to hike excise duty on diesel and petrol as global crude prices fell to a record low.
He said the earlier governments used to achieve fiscal deficit targets by resorting to expenditure cuts, adding that during the previous UPA rule, the cut was as high as Rs 1.20 lakh crore and “this is a harsh reality.”
The government was following “proper fiscal planning” and India should take advantage of falling oil prices, he said.
Jaitley further said the drop in oil prices is passed on to consumers as petrol prices have been reduced 20 times and that of diesel 16 times.
The Leader of the House was responding to Opposition criticism over increasing excise duty on petro products at a time when the global crude prices had drastically fallen.
Responding to the criticism, Jaitley said that following reduction in fuel prices by oil companies, many a times, state governments, including those led by Congress, resorted to hiking the VAT rates.
A part of excise duty on diesel and petrol went towards building national highways and rural roads, the minister said, adding those who drove vehicles “must pay for it”.
He further said the revenue from excise collection also shared with states. Besides, oil companies too make up for their past losses.
Jaitley said earlier the government used to subsidise petrol and diesel sales in the country to compensate the oil PSUs for their losses.
As the House met for the day, Congress and other opposition parties came down heavily on an item in the supplementary agenda regarding hike in excise duty.
Raising the issue, Congress leader Anand Sharma said the government saved USD 88 billion on account of fall in global crude oil prices. The benefits, he said, were not being transferred to consumers and alleged that the government was “profiteering” from the sharp drop in crude prices and trying to cover up for its “fiscal mismanagement”.