Union Finance Minister Nirmala Sitharaman's clarification that the entire cost of the reduction in excise duty on petrol and diesel will be borne by the central government and the state's revenue won't be impacted by the move has triggered a political controversy in Rajasthan. It has nullified the claims of Rajasthan Chief Minister Ashok Gehlot who had said that the recent fuel price cut by the central government will lead to an annual revenue loss of Rs 1200 crore for the state. Soon after the price cut, Gehlot had said, "Due to the excise cut by the central government in petrol and diesel price, the state government's VAT on petrol will be reduced by Rs 2.48 per litre and the diesel price shall be reduced by Rs 1.16 per litre which will make petrol cheaper by Rs 10.48 and diesel by Rs 7.16 per litre in the state. Due to this, there will be a revenue loss of about Rs 1200 crore per year to the state.
The state had suffered a revenue loss of Rs 6,300 crore due to the reduction of VAT twice in the past. By adding today's deduction, the state will suffer a revenue loss of about Rs 7500 crore per annum," said Gehlot. Meanwhile, BJP state president Satish Poonia said that as VAT has not been reduced by the Congress government, the most expensive diesel-petrol in the country is being sold in Rajasthan. In such a situation, Gehlot should give relief to people by reducing VAT. BJP Yuva Morcha state president Himanshu Sharma has said that if the Gehlot government does not reduce VAT in 3 days, then the BJYM will protest on the streets. He said that last Diwali, after the Central government gave relief in excise duty on petrol and diesel to the general public, the BJYM urged the Rajasthan government to reduce VAT on petrol and diesel on the lines of the Centre.
Due to the movement of the Yuva Morcha, the Rajasthan government decided to reduce VAT on petrol by Rs 4 and on diesel by Rs 5. Blaming the Central government for inflation has become a habit of the Rajasthan Congress government. Now it becomes the responsibility of the Rajasthan government to reduce VAT on petrol and diesel on the lines of the Central government. Otherwise, the BJYM will agitate on the streets and expose the dual character of the state government before the public, said Sharma.