Modi's 'federalism not cooperative but coercive': Rahul on fuel price

Congress leader Rahul Gandhi on Thursday hit out at Prime Minister Narendra Modi, saying his federalism is "not cooperative but coercive", and the country needs a PM who treats states as equal partners and not adversaries.

His remarks came a day after Modi flagged higher fuel prices in many opposition-ruled states and urged them to reduce VAT in "national interest" to benefit the common man, and work in the spirit of cooperative federalism in this time of global crisis.

Gandhi alleged that the prime minister is abdicating his responsibility by blaming states for the high fuel prices even when the Centre has taken 68 percent of all fuel taxes.

"High Fuel prices - blame states. Coal shortage - blame states. Oxygen shortage - blame states," he said in a tweet.

"68% of all fuel taxes are taken by the Centre. Yet, the PM abdicates responsibility. Modi's Federalism is not cooperative. It's coercive," Gandhi alleged.

In a Facebook post later, he said, "68 percent of total Fuel tax goes to the Modi Government while states get only the remaining 32 percent."

"Yet, the PM and his Government attack States and ask them to give up on their revenue and rights. This is not co-operative federalism. It is coercive federalism which is shamelessly selective in nature against opposition ruled states. India needs a PM who treats states as equal partners. Not as adversaries," he said, using hashtag "#BJPFailsIndia".

Modi had raised the issue of many states not adhering to the Centre's call for reducing Value Added Tax (VAT) on petrol and diesel after his government slashed excise duties on them in November last, and called it "injustice" to people living there and also harmful for neighbouring states.

At a Congress briefing later in the day, party spokesperson Abhishek Singhvi said the BJP is trying to spread "falsehood" as the total taxes earned by the government is to the tune of Rs 27 lakh crore and states do not have many other options but to earn meagre revenues through taxes on petroleum products.

He said it is unfortunate that the BJP leadership is spreading "misinformation" about taxes on petrol and diesel, and is "insulting the intelligence" of the common people. He said while the Centre is not willing to share its revenues with states, it is also asking states not to earn any revenue of their own.

"It is really unfortunate, especially when it is coming from high government functionaries. They should not insult your intelligence, my intelligence and the intelligence of the average man of India. We had given out figures, forget all the details. Simple figure is a total how much have you gorged and gobbled up, central government? The figure is a massive one," Singhvi said.

Leader of Opposition in Rajya Sabha Mallikarjun Kharge said in a tweet, "For every Rs 100 collected as taxes on fuel, the Modi govt pockets Rs 68."

"Modiji, if you really believe in co-operative federalism, why don't you first share the extra ?18 with the states? Both can then cut taxes and reduce the burden on the people," he said.

Singhvi alleged that while the Centre has earned approximately Rs 27 to 29 lakh crore, the states have not got anything close to that.

"You don't give several states their grants....you don't give that. On the other hand the poor state is scrounging for a little bit of money by the VAT. You are saying-- you close the VAT or reduce the VAT, I will not touch my 27 lakh crores. Is this not insulting your intelligence?"

Singhvi demanded that either the GST on petrol and diesel be brought to pre-2014 levels or the fuels brought under the GST regime. No one is stopping the Centre from doing so, he said.

Asked about the BJP's claim that opposition-ruled states are not reducing VAT whereas those governed by the saffron party have, the Congress leader said, "This is factually wrong and falsehood. There are several states which have reduced (state taxes) on petrol and diesel, including Rajasthan and Maharashtra."

"States individually have different choices...how can it be expected to reduce just because central government reduces, you are not seeing it contextually. This is the way of misleading the nation. The macro picture is important, not state-wise," he said.

Singhvi said the Centre is not ready to share with states the Rs 27 lakh crore revenue it has earned from petroleum products, and added it is neither giving grants to states nor making reimbursement.