Economic outlook cloudy in FY20: RBI annual report

New Delhi, May 6: Taking a cue from states, the Centre announced one of the steepest hikes in duties on petrol and diesel in the recent past, by raising it by Rs 10 and Rs 13 per litre, respectively, in a notification issued late on Tuesday.

Retail prices, however, will see no change as the price hike will be absorbed by oil marketing companies against the fall in crude prices.

Road and infrastructure cess was hiked by Rs 8 for petrol and diesel and the special additional excise duty (SAED) was hiked by Rs 2 per litre and Rs 5 per litre, respectively. While the road cess will only go into the Centre’s coffers, the hike on account of SAED will be passed on to states via devolution at 42 per cent. Hence, the states will get only Rs 0.84 per litre in case of petrol and Rs 2.1 in case of diesel.

The decision comes after several states increased the value added tax (VAT) on petrol and diesel making use of the lower price regime. The Delhi government on Tuesday increased VAT on petrol and diesel to 30 per cent each, from 27 and 16.75, respectively. As a result, the price of petrol in Delhi increased by Rs 1.67 to Rs 71.26 a litre and diesel by Rs 7.10 to Rs 69.29 in Delhi on Tuesday.

Amid falling international crude oil prices, the Centre introduced an enabling provision in March to raise excise duty on petrol and diesel by Rs 8 per litre in the Finance Act. The government had on March 14 raised excise duty on petrol and diesel by? 3 per litre each, which was to help raise an additional ?39,000 crore in revenue annually.

This duty hike included Rs 2 a litre increase in SAED and Rs 1 in road and infrastructure cess. It raised SAED to Rs 10 for petrol and Rs 4 for diesel. The limit has now been increased to Rs 18 a litre in case of petrol and Rs 12 in case of diesel by way of amendment of the Eighth Schedule of the Finance Act.

Economists said the move would impact retail inflation by over half a percentage point at least. “With lower consumption, there was loss of revenue for Centre and states, who earn Rs 6 trillion annually or Rs 50,000 crore monthly from fuel. Amid lockdown in April, the collection must have come down to just Rs 5,000 crore, and this will hold for May.

This means that Centre and states have lost 20 per cent of annual revenue from fuel. Hence, they have hiked duties to recover losses,” said Madan Sabnavis, chief economist, CARE Ratings. He added that the hike will impact inflation by at least 0.6-0.7 percentage points.

According to industry experts, an estimate of the additional government revenue cannot be made as the consumption of petrol and diesel has dropped to 40 per cent of what it was before the lockdown. The duty hike comes following a drop in international crude oil prices in April, owing to lower consumption figures globally. At 11.50 pm on Tuesday, Brent was priced at $30.67 a barrel, while West Texas Intermediate (WTI) crude was seen at $24.36 a barrel. On Monday, the Indian basket of crude oil was priced at $23.38 a barrel, after touching a 15-year low last month.

India is among 58 nations, including 27 European Union members, who have moved a draft resolution demanding evaluation of the World Health Organisation (WHO)'s response towards the novel coronavirus pandemic.

The European Union-led draft resolution on global COVID-19 response is set to be tabled at the upcoming World Health Assembly on Monday.

The draft resolution demands initiation "at the earliest appropriate moment to review experience gained and lessons learned from the WHO-coordinated international health response to COVID-19".

"We are deeply concerned by the morbidity and mortality caused by COVID-19 pandemic, the negative impacts on physical and mental health and social well-being, the negative impacts on economy and society and the consequent exacerbation of inequalities within and between countries," read the draft.

"We express solidarity to all countries affected by the pandemic, as well as condolences and sympathy to all the families of the victims of COVID-19," it added.

The resolution says timelines are to be evaluated regarding "recommendations the WHO made to improve global pandemic prevention, preparedness, and response capacity".

The WHO on January 23 declare a global health emergency, but did not declare it and waited for a week for its director-general Tedros Adhanom Ghebreyesus to return from China.

By that time, COVID-19 cases increased 10 times and the virus entered 18 countries.

According to Health Policy Watch, till as late as February, the WHO did not support countries for imposing travel restrictions to China.

"When countries began evacuating their citizens from Wuhan, the COVID-19 epicentre, the WHO said it did not favour this step".

The WHO finally declared it a pandemic on March 11.

The global health body has come under criticism not just from the US for its response being "China-centric".

Jaipur, Jul 20: In a startling revelation, Rajasthan Congress MLA Giriraj Singh Malinga has claimed that rebel leader Sachin Pilot offered him Rs 35 crore to switch to the BJP but he refused. 

Speaking to the media in Rajasthan capital Jaipur, Malinga, who represents Bari constituency, said he had informed Chief Minister Ashok Gehlot about Pilot’s “offer”.

“I, too, had offers but I refused. I had spoken to Sachin ji, he asked me to switch sides and I refused. This is a wrong thing, I will not do it for money,” Malinga said.

“I said that when we left Bahujan (BSP, in 2008), where one has to give money to get a ticket, whereas in Congress and BJP, that is not the system. I was offered a lot of money. Sachin Pilot had said money is not an issue, you ask what you want and you will get… Rs 35 crore or more, but I said it is wrong,” he added.

Malinga said he had had the conversation with Pilot 2-3 times, first in December during the panchayat delimitation, and later before the Rajya Sabha elections last month.

He added that the BJP had never reached out to him, and neither had he spoken to them. “I have no animosity with Pilot but I am speaking the truth,” he said.

The state plunged into a political crisis after former deputy chief minister Sachin Pilot declared rebellion on 12 July, claiming to have the support of 30 MLAs. By the next day, however, he could not prove the support of more than 18 legislators.

On 14 July, 19 MLAs, including Pilot, were served notices by Speaker C.P. Joshi, who asked them to respond by Friday after a petition filed by the chief whip of Congress sought their disqualification from the state assembly. The party also sacked Pilot and two Rajasthan cabinet ministers from their respective posts the same day.