'Oil price hike no tax bonanza for govt'

Finance Minister P Chidambaram today categorically rejected the Left parties' allegations that the government was benefiting from the rise in international crude oil prices.

Confronting the Left with facts and figures during a discussion on price rise in the Rajya Sabha today, Chidambaram termed it a "misconception" that the rise in crude oil price was a "tax bonanza" for the government, as alleged by the Left which claimed that due to ad valorem tax on petroleum products, the government stood to gain from it.

"Contrary to popular perception, we didn't even meet our target...we did not get any tax bonanza last year nor do we expect to get it this year," Chidambaram said, adding that he had sent the figures to CPI(M) Politburo member Sitaram Yechury who had acknowledged its receipt.

He said in 2004-05, the total collection from Customs and excise duties on petroleum products stood at Rs 56,358 crore.

In 2005-06, against the budgeted target of Rs 64,738 crore from these duties, the government could collect Rs 62,874 crore only, a shortfall of Rs 1,864 crore.

On the Customs side, there was an addition of Rs 3,986 crore, while on the excise side there was a shortfall of Rs 5,850 crore.

Yechury had apparently chosen not to go public with this information as it flew in the face of the Left parties, which have been accusing the government of making money out of aam admi's woes on account of the increase in the prices of crude oil.

His colleague in the Politburo and fellow Rajya Sabha member Brinda Karat was taken aback by the FM's revelations as she apparently had no idea about the communication between Yechury and Chidambaram.

She argued that as per her information government's earnings from customs and excise duties on petroleum products had gone up from Rs 96,000 crore in 2002-03 to Rs 1,26,000 crore in 2005-06.

The FM said that the figures he gave in the Rajya Sabha were correct and asked Karat the source of the figures she was quoting.

He refused to comment on the figures cited by her. At that point the Left parties staged a walkout saying that they were not satisfied with the FM's response on price rise.