Shimla: Burdened by the increased commitments to freebies promised in the polls, the cash-strapped Himachal government has hiked the VAT on diesel by Rs 3 per litre which will make the fuel more expensive. This has added to the woes of the people reeling under flash floods and landslides triggered by incessant rain.
The VAT on diesel sold in the state will increase from Rs 7.40 to Rs 10.40 per litre which is an increase from 9.9 per cent to 13.9 per cent. The freight charges for small trucks have been raised by 90 paise per kilometre and for large trucks by Re 1.50 per kilometre. The revised rates became effective from Saturday thus making the transportation of goods across the region more expensive which will push up inflation.
Chief Minister Sukhwinder Singh Sukhu justified the hike as necessary to mobilize resources for the repair of infrastructure damaged by heavy rains and massive flash floods in the state.
Sukhu claimed that the diesel prices in Himachal Pradesh are much less than neighbouring states of Uttarakhand, Haryana and Punjab.
“We are facing a grave natural calamity. Some hard decisions will be required to mobilise resources and help the state to recover from the devastation caused by the heavy rains in the state,” he said .
Reacting to the VAT hike, Leader of Opposition Jairam Thakur said that this was the time to provide relief to the disaster-hit state, not to increase the financial burden on them.
“I ask the Chief Minister to reconsider his decision. Everyone is worried in this hour of disaster. In such a situation, the government should consider giving relief to them” he said.
Thakur said this was not the right time to impose such burdens on the public .Even if it was necessitated by the situation, the government should have explored other options as the price of diesel will affect everything. Inflation will increase due to increase in diesel prices, he added.
Thakur termed the hike illogical. There have already been pressures from the transporters lobby to increase the freight charges in the industrial belt of Baddi-Brotiwala-Nalagarh, Asia’s biggest pharmaceutical hub.
Two months back, the truckers had gone on strike at two mega cement plants asking for revision of the freight charges.The VAT hike, which is the second ordered by the state government after coming to power, will have a huge cascading effect on the transport sector and lead to inflation as the transportation of goods will become more expensive.
Meanwhile, the Baddi-Barotiwala-Nalagarh Truck Union and the Bilaspur Truck Operators Co-operative Sabha n Saturday announced an increase in freight charges.
The move has created a piquant situation for the industrialists whose units were already facing a shut down like situation following disruption of the roads as result of rains and floods. The labour working in the industrial units could not reach for work which adversely hit production.
” Now we will be left to face a new challenge which will have an impact on prices and overall costs,” said an industrialist, when contacted over phone at Barotiwala,Solan .