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Old 14th March 2020, 17:12   #16
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Default re: Crude oil prices crash, but India refuses to slash fuel prices

I’d be happy if the money getting taxed is spent efficiently and well on welfare schemes and other infrastructure needs but we all know how much really gets spent on them and how much gets routed to many through illegal and pseudo-illegal means.

Just frustrates me that a person who aspires and buys even a basic motorcycle pays taxes every single time they open their wallet and the money goes to some rich kid of a corrupt politician or bureaucrat who looks at this motorcycle guy as a pleb from inside his Jaguar or Land Rover.

This country needs serious reforms.
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Old 14th March 2020, 21:21   #17
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Default re: Crude oil prices crash, but India refuses to slash fuel prices

As such, the monthly GST collection for March 2020 will miss the targeted amounts. Many industries and services are reporting a lack of demand and negative sales growth. With the Corona virus threat, industrial and the GDP growth could be further jeopardised and signs will be perceptible from April 2020 onwards.

The move to raise Rs 3=00 as excise duty of petrol and diesel, today will most likely offest the lower central and state sales tax collection on the tumbling fuel prices. The basic price of these fuels if reduced, result in a lower tax collection for the govt coffers.

The googly move by our govt was not unexpected and was predicted after the free-falling of fuel prices commenced earlier this week.

Summarising, fuel buyers are the most gullible and it's proven over the decades that they have the tenacity to withstand fuel price shocks !
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Old 15th March 2020, 10:19   #18
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Default re: Crude oil prices crash, but India refuses to slash fuel prices

I do not have a problem with the increase in duty on petrol at this moment.
The problem arises when the crude oil prices increase again. The government won't decrease the excise duty at that time and the high fuel prices will be blamed on global fuel price increase and the game of politics will begin. Everyone will completely forget about the excise duty hike which is highest in last 8 years.
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Old 16th March 2020, 06:51   #19
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Default re: Crude oil prices crash, but India refuses to slash fuel prices

Coming to the topic, whatever happened to all that excise collection from the era of low oil prices? I don't see any benefits - can someone point me to the information that documents what exactly was done with the huge revenue (how much exactly) and which projects benefited? Where should I look to see who and what benefited?

Last edited by vb-san : 16th March 2020 at 07:17. Reason: Typo, and unwanted/Off-Topic comment edited off. Thank you!
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Old 16th March 2020, 10:14   #20
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

The problem is that - most people who actually feel the pinch of high fuel prices are not privileged to know how taxation works and are not part of forums like this to raise their voice / concerns/ opinions
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Old 16th March 2020, 10:33   #21
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

The Govt has simply eaten up the extra taxes earned through the oil dividend the last time prices fell and will likely do the same again. These gains are being used to cover routine deficits without making the right efforts to make Govt spending more efficient and effective. While the current sanitation has some positive points in their favour running the economy isn't one off them. Also they don't seem to have a willingness to listen to advice that isn't in line with a preconceived belief. So all they get to hear is an echo chamber.
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Old 16th March 2020, 10:50   #22
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

Quote:
Originally Posted by Sk8r View Post
The problem is that - most people who actually feel the pinch of high fuel prices are not privileged to know how taxation works and are not part of forums like this to raise their voice / concerns/ opinions
Everyone can know, if all governments give a statement of expenses and reserves, jobs done per month per field, benefits doled out to the less fortunate, awareness creation spending etc.. like they do in social activity clubs, corporations, etc. They don't do they? All they do is put occasional adverts in the newspaper which read more like PR and all their expenses are in round figures, never accurate, never detailed. Economists also sometimes give out data which is largely based out of government issued facts/fudges to begin with, and most economists don't know the head or tail of practical realities, all they do is project how imperfect the monetary system is, and even lesser people complain because their education system has told them not to question the rulers.

I'm not complaining about fuel prices, if I own it (car) I've to give it (money) and 10 rupees here and there matter nothing. We pay taxes (I.T, road tax, Capital Gains tax) , GST on purchases, fuel surcharge, everything, happily.

However, I'm not going to fall for the Government being the greatest victim of all time and the greatest hero of all time, simply because they don't share what they know and almost every snippet they do share is heavily edited and fudged like cover photos in glamor magazines.

"If the people were to ever find out what we have done, we would be chased down the streets and lynched." - George H.W Bush.
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Old 16th March 2020, 11:31   #23
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

The govt increasing the duty was probably the best they could do at this time. They have no immediate solution to stimulate demand (of fuel and overall in the economy) hence they took the smart route and bridge some shortfalls in their collections which have been a concern for more than 3 Quarters now.

At least they can keep the deficit under check by doing this which we don't really know where it will end up with Corona virus breathing down our necks.
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Old 16th March 2020, 11:39   #24
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

Whether it is the current ruling party (NDA) or the one sitting on the other side (UPA), all will always hike the tax on fuel. I remember BJP in karnataka crying loudly when previous goverment hiked tax, and now they did the same in the budget. Center also doing the same, doesn't surprise, what these parties should do is shut up about it.

Meanwhile, I wonder how it will affect me while I ride my Ather 450 around for my daily commute
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Old 16th March 2020, 11:50   #25
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

Petrol has been heavily taxed for years. Perhaps we are used to it.

As long as we are not paying extra on Petrol AND
money goes for development projects instead of pockets of ministers, bureaucrats or given to not required subsidies; We are good!

Last edited by procrastinator : 16th March 2020 at 11:53.
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Old 16th March 2020, 11:56   #26
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

The problem in India is very simple, the government doesn't earn a lot of money from income tax, so the only source of revenue is commodity tax like GST, fuel tax et al. The reasons are multi-fold with people withholding their real incomes and the fact that Indians in general are still poor with less millionaires than Germany or the UK which have much less populations (though more billionaires than them ironically). Generally the Indian economy picks up when the oil prices drops and I hope that would be the case now.

The government's hands are tied now since our economy was sluggish already and there was quite a fall in revenues while the RBI's hands are tied since they have already been cutting interest rates like crazy. So, unsure if India can implement a stimulus package like the US, EU and UAE have done to alleviate the impact of Corona-virus.
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Old 16th March 2020, 13:27   #27
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

It would be interesting to see what would be the rate of increase in our fuel price when crude oil prices in international market start to rise. Only God knows!
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Old 16th March 2020, 14:17   #28
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

To play the devils advocate, this maintaining of duties is much needed. First, let us define the 'common man'. If you own a car, you are a part of the 2% of the population that owns a car (Niti Ayog said that 22 / 1000 people own a car).

Per the last census, a whopping 55% of the population either walk to work or work from their work place (or minimal walking)

https://www.thehindu.com/data/india-...cle7874521.ece

Throw in cycles and public transport, and 75% of the population aren't affected by the fuel price change (In India bus companies run by the state rarely if ever pass on cost price increases).

2.7% of the population (I would guess this includes ride hailing) takes cars, 12% take motorised 2 wheelers by comparison, 13% take cycles daily.

Urban upper middle class India (which we all are) is severely disconnected from the real India so much so that our idea of the 'common man' or 'middle class' is severely warped by this bubble.

What about inflation you might ask...In the WPI basket fuel accounts for 12%.

https://tradingeconomics.com/india/p...-prices-change

However you spin it, the true common man by virtue of his sheer backwardness (unfortunately) is disconnected from fuel prices for the most part. The real common man in India lives like his counterpart in Europe or America from a century ago.

So why is this good imo?

Infrastructure - India needs infra TODAY and loads of it. A large part of this fuel pricing goes into funding what is presently modern India's and one of the top 5 largest infra pushes in the post independence era.

The govt has already been building roads, rails and metro networks, sanitation, power at a break neck speed by Indian standards, and the latest NIP envisions something like $25bn in special infra projects and even this is not enough given our backlog and really terribly urban infra.

If the govt can tax us rich (and yes, we are rich if we own a car and middle / upper middle income class if we own a bike) and redistribute some of that in the form of infra, a large portion of which we ourselves use, then so be it.

Older people here (am 40) can testify to the fact on how our road network has drastically improved in quality and quantity over the past 15 odd years, and if the current pace of improvement and addition is maintained, the next 15 years should be another revolution in infra.

Last edited by BlackPearl : 18th March 2020 at 16:50. Reason: Edited short forms and minor typos. Thanks.
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Old 16th March 2020, 14:52   #29
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

We are grossly underestimating the financial impact of COVID-19 and the fact that the government is doing two levels of testing and quarantine for free. The interests in the global loans don't go away. GST collections will drop due to market slowdown and there needs to be revenue for socialism.

Please have a look at what pure play capitalism is doing to developed nations like the US where people have to pay out of pocket expense for testing right now.
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Old 16th March 2020, 15:02   #30
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

Though hard to digest, as other members have pointed out, Govt has no option but to look at taxing fuel since direct tax collection is going down quarter after quarter and there are fixed expenses to pay. We need to be content that prices are not going up.

Last edited by srini1785 : 16th March 2020 at 15:12. Reason: Quoted post deleted
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