Centre, states should talk on reducing fuel prices: Sitharaman

Ahmedabad, Feb 25: Union Finance Minister Nirmala Sitharaman on Thursday said there should be less burden on consumers and both the Centre and states should talk with each other over reducing taxes on diesel and petrol whose prices have risen sharply in recent times.

Asked if the Centre is mulling to reduce cess or other taxes on fuel to give some respite to consumers from high prices of diesel and petrol, she said the question has put her in "dharm-sankat" (dilemma).

"No hiding of the fact that the Centre gets revenue from it. Same is the case with states. I agree that there should be less burden on the consumers.

"For that, both the Centre and states should talk with each other (for reducing central as well as state taxes on fuel)," she said during an interaction with the students of the Indian Institute of Management-Ahmedabad (IIMA).

Earlier in the day, Reserve Bank of India (RBI) Governor Shaktikanta Das said there is a need for coordinated action between the centre and state governments to reduce taxes on petrol and diesel prices.

During her interaction at the IIMA campus, Sitharaman took a dig at those demanding that the Minimum Support Price (MSP) regime be brought under the purview of law, and asked why it was not done when Congress-ruled UPA was in power at the Centre before 2014.

Besides seeking a repeal of the new agri-marketing laws enacted by the Modi government, farmers protesting at Delhi borders are demanding a legal guarantee for MSP.

Referring to the ongoing protest outside Delhi against the three farm laws, Sitharaman said these legislations were not about MSP.

"The protest is about the three laws which were passed (in Parliament in September last year)...these laws have to do nothing with MSP (of crops)

"And since MSP is not a part of the three laws, to come and protest against the three laws and then raise MSP (issue) does not add up," she said during an interaction with the students of the Indian Institute of Management-Ahmedabad (IIMA).

Sitharaman said the Centre has explained to farmer unions during talks that the existing MSP regime is not part of the contentious laws.

"The Union agriculture minister sat and discussed with the farmers and asked them; ''see MSP is not part of the three laws, but if you want to discuss it, then tell me what it is''," said Sitharaman when a student sought her views on giving a legal backing to the MSP mechanism.

"There are 22 items which are there on the MSP list. Though MSP is offered, farmers are not coming. Because, outside the market, they get much higher rates than the MSP. This actually shows that MSP held strongly, prices are above it and farmers benefit from that," she said.

"If indeed MSP has to be put in the statute and give it the backing of law, why was it not done in the 10 years of the UPA government (2004-14)? Why was it never a part of the farm reform discussions and why no manifesto carried it till now?"she asked.

Asked if the Centre would be able to achieve the disinvestment target set for FY22, Sitharaman replied in the affirmative but admitted that such targets could not be achieved during previous fiscals due to different reasons.

"Last year it was COVID-19, and the year before that the economy was slowing down and there was no appetite for the market for disinvestment.

"So, no hesitation is saying we could not achieve our (previous) targets. But now, there is an appetite and I am sure we will achieve," she said.

Sitharaman termed loss-making PSUs as "laggards" and said the government wants to run profitable state enterprises in a professional manner by way of disinvestment.

"For the new India, just the public sector will not be sufficient to meet the growing demands. So when we are talking about bare minimum presence (of PSUs), we are going to ensure big, scaled up bare minimum presence.

"In this sense, even if they are one of two, they will be well managed. We should not continue with laggard PSUs. They can not be laggards and be in the public sector also, because they are run by taxpayer''s money," she added.