BUSINESS

States can levy tax on petroleum products

There is “an understanding that the 300 (existing exemptions) will come down to 90 for both the Centre and the states…there seems to be a broad political consensus on this,” says Arvind Subramanian, Chief Economic Adviser to the Finance Ministry.  

The state governments and the Centre have apparently worked out a win-win model to address the issue of including petroleum products in the proposed Goods and Services Tax (GST) list.

The states can levy the Value Added tax (VAT) for a “certain period,” said Chief Economic Adviser to the Finance Ministry, Arvind Subramanian.

“Constitutionally petroleum products will be part of GST, but for a certain period, the states will have the freedom to determine the tax rate,” he said said. . Mr. Subramanian had said earlier that there was “an understanding that the 300 (existing exemptions) will come down to 90 for both the Centre and the states…there seems to be a broad political consensus on this.”

Bengal’s economy slides

Bengal’s economic fortune continues to slide over decades. While the debate on a “productive economic strategy” is routinely debated, Mr. Subramanian said that it is “shocking” that Bengal has “lagged behind” other States in higher education.

“The state is below national average and it has affected long-run development of the State,” he said. “Water, human capital, power or its geographic position vis-a-vis East Asia are the factors which can help in this turnaround,” he said. Rice production has not increased in the State despite land reforms initiated by the Left.

“Despite land reform, rice yield at 2.71 per cent is lower than Punjab or Bangladesh,” Mr Subramanian said.