“We have decided to fully subsidise the increased cost to customers in all categories”, he said at Guntur. This would cost the government Rs 525 cr annually.
The government, however, ruled out any reduction of VAT on petrol and diesel. “At this point we are not thinking of reducing tax on petroleum products. Given the financial constraints we have done our best”, finance minister Mr K Rosaiah told a Press conference.
AP levies 33 per cent VAT on petrol, which is the highest in the country. It levies 22.25 per cent VAT on diesel, which is the second highest after Gujarat.
He shot down the Opposition demand to reduce taxes by saying, “It is not practical”. The entire Opposition had called for a state wide bandh today protesting against the hike.
Even while calling for state-wide agitations against the Centre for hiking the fuel prices, AIADMK supremo Ms Jayalalitha, strongly condemned the Left parties and said their agitations were meant to deceive the people, since they were continuing their support to the
Centre.
Both the major Opposition parties in Tamil Nadu, Ms Jayalalitha’s AIADMK and Mr Vaiko’s MDMK, strongly flayed the increase in petrol, diesel and cooking gas and announced protests on two consecutive days, even as the Tamil Nadu government cut tax on diesel by two per cent.
