States Under Pressure
Uttar Pradesh will take a Rs 20,000 crore-hit in VAT
collection to facilitate a Rs 2.50 reduction in per litre rates of
petrol and diesel.
BJP- and NDA-ruled states have been hit the hardest by the Centre's decision to cut fuel price. Take Uttar Pradesh - the state will take a Rs 20,000 crore-hit in VAT collection to facilitate a Rs 2.50 reduction in per litre rates of petrol and diesel. Central devolution will claim another 0.90 paise per litre. Most NDA-ruled states are finding it tough to manage - they have to fund UDAY electrification, infrastructure augmentation, and rural penetration while absorbing losses from fuel price slashes. With elections around the corner, NDA-ruled states are a worried lot indeed.
