Following stiff opposition from her own party MLAs, Delhi Chief Minister Sheila Dikshit was today forced to withdraw the budget proposal to levy 5% VAT on CNG within a week of her announcing the move.
The price of CNG, which fuels public transport in the city, will remain at Rs 35.45 per kg while the price of petrol will come down by 92 paisa per litre from current Rs 71.16 as per the budgetary proposals passed by the assembly.
The withdrawal of VAT on CNG came following strong opposition from a section of Congress MLAs who argued any increase in the price of the fuel will result in hike in taxi and auto fares which will have a negative effect on the party ahead of next year's assembly polls.
Replying to the debate on the budget, Dikshit also withdrew the proposal to levy 5% VAT on textiles costing above Rs 300 per meter, garment set priced above Rs 600 and sarees costing above Rs 1,000 to "protect" the textile industry in the city.
Explaining the decision to revoke the decision to withdraw VAT on CNG, Dikshit cited the "anger" of the MLAs and the demand of the common man.
"You (Congress MLAs) have expressed your anger. We are sitting here (assembly) because of the people of Delhi. If they demand something, we will have to listen to them. People are reeling under price rise also," the Chief Minister, who had earlier ruled out roll back of VAT on CNG, said.
VAT would have pushed up the CNG price to Rs 37.20 per kg from the current Rs 35.45 per kg, a rise of Rs 1.77.
Asked when VAT reduction on hiked component of petrol will come into effect, Dikshit said goverment will issue a notification in a day or two, which would bring down petrol price to Rs 70.24 from current Rs 71.16.
The decision to withdraw VAT on CNG and costly garments was taken at a cabinet meeting in which a number of ministers also apparently opposed imposition of the tax on the fuel.