Speculation rife about a possible review of fuel cess in Kerala

CM’s meeting with CPI(M) State secretary M.V. Govindan lends credence to conjecture. LDF convener E.P. Jayarajan says the cess hike is disadvantageous to the State

Speculation was rife on Saturday that the government might dilute the Budget proposal to levy a ₹2 ‘social security cess’ on diesel and petrol retailed in the State. There is still no official word from the administration about the likelihood.

Nevertheless, Left Democratic Front (LDF) convener E.P. Jayarajan said the cost differential between the fuel price in Kerala and neighbouring States was economically disadvantageous to the exchequer. His words suggest a possible rethink.

Chief Minister Pinarayi Vijayan’s close-door meeting with Communist Party of India (Marxist) [CPI(M)] State secretary M.V. Govindan in Kochi also lends some credence to the conjecture that a review is in the offing.

‘Just a Budget proposal’

Mr. Govindan said the cess was merely a Budget proposal. He stopped short of committing whether the government would freeze or slash it. Communist Party of India (CPI) State secretary Kanam Rajendran said his party would articulate its stance in the LDF.

The Congress and the Bharatiya Janata Party (BJP) estimate that the increased fair price of land, levy on fuel and liquor, and proposed hike in power and water tariff will trigger widespread anti-government sentiment and have announced aggressive street protests.

The LDF blamed the Centre for the cess. Kerala needed ₹11,000 crores to meet its social security responsibilities, and funds were at a premium. The Centre had unilaterally halted GST compensation payments and diminished the State’s divisible pool dividend and revenue deficit grant. Privately, some LDF leaders reportedly felt the hike in fuel cost might offset the ₹2,000 crore Budget allocation to mitigate inflation.

Impact of rate hike

Dearer fuel would push up the expense of transporting goods and delivering services. It would inflate the cost of staples, daily commute and cooking gas, hitting household budgets. The hike comes at a politically sensitive time for the LDF and could cast a shadow on the upcoming campaign against the Centre’s ‘anti-poor and pro-corporate’ policies. Yet, the jury is still out on whether the ruling front would forsake or reduce the levy.

Protest continues

Meanwhile, the protest by the Opposition outfits against Chief Minister Pinarayi Vijayan and the government he headed in the wake of the State Budget continued in Kochi on Saturday also.

Youth Congress activists waved black flag at Mr. Vijayan when he emerged out of the Ernakulam guest house while on his way to attend a function at Marine Drive in the morning. Activists led by Youth Congress district president Tito Antony barged into the guest house campus while Mr. Vijayan’s cavalcade was on its way out. Following this, police officers in charge of the Chief Minister’s security nabbed them and shifted them to a police station.

Three Youth Congress activists, including Mr. Antony, was in custody till late in the evening.