TN doesn’t need dictation from Centre on fuel tax rebate: Palanivel Thiaga Rajan

Tamil Nadu Finance Minister Palanivel Thiaga Rajan, one of the harshest critic of the Centre’s cut on fuel taxes, in a scathing attack on Union Minister Nirmala Sitharaman, has said that the southern state is performing far better on economic parameters than the central government and doesn’t need tutoring or dictation from people who perform “worse than us”.

“We have one of the best statistical outcomes of any government in India. We brought the revenue deficit down from ₹60,000 something to close to ₹40,000 crores. Our fiscal deficit is half that of the Union government. Our per capita income is twice that of the national average. Our inflation is only 5 per cent when the national inflation is 8 per cent. We know what we are doing. We don’t need anybody to tell us what to do. We don’t need dictation from people who perform worse than us. We don’t like other people extra-constitutionally, authoritarianly force us to do things we don’t want to do,” he said in an interview with NDTV.

After announcing the Centre’s decision to slash export duty on petrol and diesel by ₹8 and ₹6 a litre respectively, Finance Minister Nirmala Sitharaman on Saturday had exhorted states, especially those who had not reduced export duty on November 4, 2021 to effect the cut from their side to provide relief to the common man.

Also read: Centre-state tax row: Who gets what when you buy fuel for ₹100

Thiaga Rajan said that such an exhortation by the central minister was utterly unconstitutional as the Constitution allows states to manage their own finances without the interference of the Centre.

“I don’t recall them using anywhere the word ‘request’. They gave demands and then I think the Union Finance Minister used the word ‘exhort’. I don’t think the constitution allows any of this to happen. The constitution allows states to manage their own finances to whatever extent we have left,” the minister told NDTV.

Terming the Centre’s tax policy “bad”, Thiaga Rajan said the government didn’t bother to consult states when it hiked the excise duty, changed it from excise to cess and surcharge, three times on petrol and 10 times on diesel, but was instead making “villains” out of states.

“When the Union government raised excise and that too shifted it from pure excise to cess and surcharge, three times on petrol and 10 times on diesel, they did not even consult the states. They cut the share given to us. At that time, they had no compassion, no consideration. They have had bad tax policy for seven-eight years, now that the chickens are coming home to roost, they are making fake villains out of us. This is atrocious. This is shameless hypocrisy,” the minister said.

Also read: Bengal will lose ₹642 crore revenue due to Centre’s cut in fuel prices: Mamata

“It went up from ₹9.4 to ₹32.5, they cut ₹5 once and ₹8 once. You take away ₹13, that’s still ₹19. That’s still double the rate that was being taxed when this government came to power. Let’s take diesel. It was ₹3.4 or something, they took it up to ₹32, they cut it by ₹ 10 and another ₹8 or 6 whatever they’ve cut. So, they are still four or five times where they were,” he added.

On Sunday, Thiaga Rajan, in a series of tweets, had lashed out at the Centre for asking states to cut down on VAT on petrol and diesel when it didn’t inform states while increasing the taxes since 2014.