Editorial

Economic burden

By Nagaland Post | Publish Date: 11/13/2020 1:22:20 PM IST

 It was like a bolt from the blue when the PDA government announced hike in taxes on petrol, diesel on November 11, on a day when the ruling NDPP was celebrating the victory of its candidate in the bypoll for the 14 Southern Angami-I assembly constituency. However, for the public in general, it was a sad day. The state government decided to enhance the rate of tax on diesel from existing 14.5 percent to 17.50 per cent or Rs 11.08 per litre, whichever is higher, and petrol and other motor spirits from existing 25 percent to 29.80 percent or Rs 18.26 per litre, whichever is higher, from midnight of November 11. The recent hike in taxes on petrol and diesel also came hardly a month and a half after the government was compelled to withdraw its COVID Cess on petrol and diesel which was became effective on April 28. The introduction of COVID cess attracted wide condemnation across the state by scores of organisations and in particular political parties. They had slammed the decision of the ruling PDA in Nagaland to impose additional COVID-19 cess of Rs.5 for a litre of diesel and Rs.6 for a litre of petrol including petroleum products. Earlier, while explaining the financial compulsion of imposing the Cess, the finance department disclosed that the government’s monthly requirement was Rs.374 crore but in April the state received only Rs.263 crore showing a deficit of Rs.111 crore. The department also said the state’s own resources had also drastically come down to Rs.21 crore from the projected estimate of Rs.98 crore (after lockdown) and indicating a shortfall of Rs.77 crore. The hike in tax on petrol and diesel and lubricants etc is not marginal but quite steep as compared with the COVID cess which levied between approximately 6% to 8% surcharges on petrol and diesel. The COVID cess itself was purely a temporary measure as the very nomenclature denoted as it was liable to be withdrawn when the pandemic situation improved. However, the pandemic situation is not likely to improve soon and it could go on for another year or so. The government had to withdraw the COVID cess under intense pressure. However, on the recent hike in tax on petrol, diesel and other items and unlike COVID cess, which was for a limited period, the state has imposed tax surcharge on fuel tax which could continue without specific period. It is quite certain that Nagaland could land itself in a precarious financial situation by the end of the current financial year as the deficit has been projected at Rs.2358.81 crore. The economic situation has not improved and neither the financial health of the government. Every state is facing huge financial problems due to the unseen problem thrown by COVID-19 pandemic. However, being among states with very limited source of revenue income, the economic woes of people will worsen even as income dwindle when prices of commodities will be more expensive owing to hikes in fuel tax that would add to transportation charges etc. The opposition NPF has demanded a rollback and in the coming days there could be protests but ultimately, a solution would have to be found and here the government of the day need to seriously ponder over long term solution.

Launched on December 3,1990. Nagaland Post is the first and highest circulated newspaper of Nagaland state. Nagaland Post is also the first newspaper in Nagaland to be published in multi-colour.

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