Thread by @KanchanGupta

#FuelPriceHike A chart that explains how petrol and diesel cost is calculated.
1. Central Excise is constant. Money Centre gets does not increase or decrease with cost of fuel.
2. State VAT & surcharge is % of cost. Higher the cost, higher the earnings of States.
Pls share.

State VAT & surcharges per litre of petrol and diesel is in % and varies from State to State. Congress-JDS raised it to 32% after forming Govt in Karnataka. Maharashtra has highest VAT on petrol. AP on diesel. Bulk of WB revenue comes from VAT on fuel.

States have limited means of raising resources. VAT on fuel and tax on booze are rich revenue earning sources. States that have prohibition have to depend on VAT on fuel. One of the reasons why prohibition is ill-conceived. Strangely prohibitionists protest loudest on fuel price.

Last evening on Arnab's @republic show CPI spokie demanded subsidy on fuel to lower prices. That is a terrible idea. Someone has to pay the subsidy bill. Congress-UPA left behind oil bond bills totally Rs 2 lakh crore and more. 'Put it on the tab' is the worst thing Govt can do.

42% of taxes accruing to Centre devolve to the States.

https://twitter.com/rkbpillai/status/1039403017974366208?s=19

Only way to cut taxes is to decrease Govt spending. Only way to cut spending is to downsize Govt. With millions being added to the population and India's population set to outstrip China's, how much can you downsize? Everybody wants freebies. But freebies don't come free. So.

Why should States accept decreased revenue by bringing fuel under GST at 18% or 28% Who will compensate the revenue fall? Common sense, no?

https://twitter.com/KiranUnnithan/status/1039409313733734400?s=19

Absolutely. Centre must help States whenever calamity strikes. But surely that cannot be done by handing out IOUs? Where will the cash come from?

https://twitter.com/c_ontrarian/status/1039411943575117824?s=19

Yes, Govt expenditure can be cut by selling nonstrategic PSUs. There is no reason why Govt should be flying planes, running trains, operating factories, hotels, bus services or for that matter Doordarshan and AIR. But the fact remains any Govt is as socialist as the people are.

I have said this earlier and I will say it again. By end-2014 Modi Sarkar should have published a White Paper fully disclosing #India's finances and liabilities inherited from Congress-UPA. Not to do so was ill-advised. Argument that investors would have fled is sheer poppycock.

I can only repeat: A Govt is as socialist as the people are.
So onward to #Venezuela. Unfortunately, thanks to animal rights activists, we do not have sufficient animals in zoos to eat.

https://twitter.com/ckolvekar/status/1039419528348872704?s=19

On Arnab's @republic show last evening I told our comrade from CPI (who claimed to know all) that the dream leftie economy, Venezuela, has contributed to global oil price rise. I added that Venezuelans are now eating zoo animals. He was offended. Of course.

On a more serious note, if you are concerned about fuel prices, read this excellent @Reuters analysis: mobile.reuters.com/article/amp/id…