Chidu's flip-flop over SUV prices, signs of an unstable governance

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Chidambaram
New Delhi, Feb 17: The interim budget is just out of the oven and it has started drawing criticism already. While the instability of the government and its economy was evident even during the 'vote on account' reading, what struck us hard was the fluctuating price range of luxury commodities.

SUV fans may have a reason to smile, forgetting the UPA's past mistakes, as the new budget may find the SUV Rs 40,000 cheaper. However, there is no certainty that the price cut would persist even after the new government is formed. Experts believe that the duty cut on SUVs and other luxury cars would have to end on June 30.

The excise cuts on SUVs in the face of fiscal deficits in the Indian economy is nothing less than an irony. The price cuts here are likely to be a huge loss of revenues for the government and a booby trap for the next government, which would be bound to increase the duty rate after four months.

Just a year back, the same commodity price was raised to 30% from 27%, citing that luxury car owners would not "mind" paying up a little more [Read here].

"SUVs occupy greater road and parking space and ought to bear a higher tax... However, the increase will not apply to SUVs registered as taxis," Chidambaram had said.

Call it sops for the 'common' man or a strategy to hold the next government in a fix, the Congress has planned an exit that would be 'memorable' for all, especially for the opposition. But on second thoughts, if the UPA government continues even after the Lok Sabha elections, would we want an unstable government, is a question that needs to be answered.

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