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Petrol, Diesel Prices Can be Cut, But Lack of ‘Political Will’ Keeping Prices in India Highest in World: SBI Economists

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Decreasing petrol and diesel price under gst sbi ecowrap report 2021

Shimla-Petrol and Diesel prices in India could be brought under control and their price could be reduced to Rs. 75 and Rs. 68, respectively, says the SBI’s Ecowrap report released by its Economic Research Department. The Indian Government can do this simply by brining these fuels under the ambit of the Goods and Services Tax (GST), the report said.

However, according to the report, lack of political will is keeping Indian oil product prices at one of the highest in the world. This lack of will arises from the fact that Centre and States are loathe to bring crude oil products under the GST regime as Sales Tax/VAT on petroleum products is a major source of own tax revenue for them. The states, in particular, would face a loss in revenue.

However contrary to this possibility, the government had been maintaining that it doesn’t control fuel prices. On February 17, 2021, on a day when petrol crossed the ₹100 mark, Prime Minister Narendra Modi had blamed it all on the previous governments. 

The report said that one of the unfinished agendas of the current GST regime is bringing petrol and diesel under GST.

Every state has its own tax structure. The states choose to levy a combination of ad valorem tax, cess, extra VAT/Surcharge based on their needs. These taxes are imposed after taking into account the crude price, the transportation charge, the dealer commission and the flat excise duty imposed by the centre. The multiple taxes have made petroleum products prices one of the highest in the world, the report said.

share of states in petrol taxes

The base price of Rs 75 for petrol and Rs 68 for diesel has been calculated on the following assumptions: Crude price at $60/bbl, exchange rate of Rs 73 for a dollar, transportation charges of Rs 7.25 for diesel and Rs 3.82 for petrol, dealer commission of Rs 2.53 for diesel and Rs 3.67 for petrol, cess of Rs 30 for petrol and Rs 20 for diesel, GST rate at 28 per cent and petrol consumption growth rate of 10% y-o-y and 15% for diesel y-o-y.

Using all these assumptions, the researchers have found that the base price for petrol and diesel comes out to be Rs 75 and Rs. 68, respectively at pan India level. At this base price, with multiple simulations Centre and States have a revenue deviation from budget estimates by only Rs. 1 lakh crore 90.4% of the GDP) after adjusting for the increase in consumption with the intended price cut.

The report further said that a dollar increase in the crude oil prices will push up the petrol price by around 50 paisa and diesel prices by around 150 paisa and bring down the overall deviation by around Rs. 1500 crore under the suggested baseline scenario.

If this tax structure is used for the Financial year 2022, when Centre and states taxes are already so high, we see that states which have the highest rates are losing revenue if they shift to this GST regime. But this flat taxation structure brings in uniformity and as per the calculations, it brings down the burden of taxes on the common man by almost Rs. 10-30 depending on the product consumed and the state in which it is consumed, the report said.

Additionally, it benefits some states which do not drastically tax their petroleum products, like Uttar Pradesh.

“Interestingly, our simulation exercise suggests that when crude oil/bbl declines by 10 dollars, Centre and states could save close to Rs 18,000 cres, if they keep the petrol prices at baseline Rs 75 and diesel at Rs 68 and don’t pass on the benefit to consumers,” the report said.

Further, the report recommended that the Government should build up an oil price stabilization fund which can be used in bad times for compensating revenue loss by cross subsiding fund saved from good times, without hurting the consumer.

Further, since November 2020, the prices of non-subsidized cylinders have increased from Rs. 594 to Rs 819 in Delhi, a substantial increase of Rs. 255 er cylinder. The data on DBTL (Direct Benefit Transfer for LPG) indicate that the subsidy amount has sharply plunged to merely Rs. 3,363 crores in April-December 20220 period from Rs 22, 635 in Financial Year 2020. There is negligible or no difference between subsidized and non-subsized cylinder.

Price hike in lpg cylinders by sbi report

The report also said that though the government has announced to give one crore more free connections to the needy over the next two years, affordability barriers still exist. The government should focus on the affordability issue and to achieve this, the SBI researchers have suggested a set of measures.

Separately, for the LPG cylinders, the report proposed an increased and graded subsidy to provide to poor consumers which can be tapered off over a period of, say, five years. For this, the Government can create a comprehensive merged database using database of Ayushman Bharat, PM-KISAN, PMJDY, PMUY and MUDRA and then provide these people with maximum four free cylinders in a year. Even if five crore people are eligible for this then the total cost to exchequer per year will be maximum Rs 16,000 crore.

Besides, the report suggested that the Government might cancel its borrowing planed in the last two weeks of March 2021, totaling Rs. 49,000 crores.

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Kinnaur Landslide: 14 Bodies Recovered in 30 Hours, Several Still Missing

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Kinnaur landslide rescue operation photos

Kinnaur: Landslide in Kinnaur district is unfolding as one of the biggest catastrophe in Himachal Pradesh as the of fatality count continues to rise. After 30 hours of the rescue operation, which was hampered multiple times due to shooting stones at the site, 14 dead bodies had been recovered till the suspension of the operation on Thursday evening. While 10 bodies were recovered on Wednesday, four more were exhumed from the rubble on Thursday.

As many as 15 persons were rescued and taken to Bhavanagar CHC for treatment.

The wreckage of the HP Road Transport Corporation bus was found scattered about 500 meters below the National Highway-5 in Nigulsari – the site of the massive landslide. The condition of the wreckage suggested there was little hope of survival of any passenger. The distraught relatives of the missing persons remained at the site, grieving with diminishing hope to see their family members alive as the rescue operation for today was suspended.

Kinnaur HRTC Bus wreckage

HRTC Bus Wreckage

The state of exhumed bodies added to the horror of the families, as well as, the rescuers. Some of the bodies were in such a state that their identification was next to impossible. While some bodies had their limbs cut off, one of them was found without the head.

As the rescue operation would be entering its third day on Friday, the death toll is likely to rise as the driver of the bus, who had survived the accident and was seriously injured, had estimated that 25-30 passengers were onboard when the landslide pushed it down the NH.

Further, there is still no sign of one vehicle (Bolero SUV), informed Director, State Disaster Management, Sudesh Kumar Mokhta. The exact number of people feared to be buried under the rubble was yet to be ascertained. According to the district administration, based on calls received from families, the number of missing people could be anywhere between 30-50.

Kinnaur rescue operation resumes

Meanwhile, some family members of the missing persons complained that while the rescue operation was initiated immediately from the Negulsari side, JCB machines took over five hours to reach the spot from the Chauri side. They complained that such a big delay was crucial and could have saved more lives.

It’s pertinent to mention that the HRTC bus had remained untraceable on Wednesday and the wreckage was found on the second day of the rescue operation. However, most passengers were yet to be traced.  

According to the Deputy Commandant, ITBP, Dharmender Thakur, shooting stones and sliding rubble posed a huge challenge for the rescue teams, which comprised of hundreds of personnel of NDRF, ITBP, Home-Guards, local police, and CISF. Undertaking this operation on a steep slope further created difficult circumstances for the teams. The lives of the rescuers were also at risk as the site remained vulnerable to reactivation of landslide.

This landslide in the Kinnaur district has become a matter of debate for geologists, environmentalists, seismologists and climatologists. Unscientific cutting of fragile mountains and blasting for the widening of roads and construction of tunnels for hydropower projects, changing patterns of rains, and seismic activity are being referred to be the reasons behind the increased incidents of landslides, especially in Kinnaur district.

At the same time, the inability of the state government to consider technical suggestions given by geological experts from time to time for mitigation of such hazards is also finding mention in the critical comments given by experts. The lackadaisical attitude of the government in the adoption of technologies, such as the early warning system developed by the IIT Mandi for mountainous regions vulnerable to landslides, is also attracting criticism.

It’s pertinent to mention that after the Kotrupi disaster – a massive landslide that had buried two buses and claimed 48 lives in August 2017-experts from IIT Mandi had carried out surveys and studies and provided several suggestions for minimizing damages, which fell into deaf ears.  

The deceased were identified as:

  1. Rohit Kumar
  2. Vanshuka
  3. Meera Devi
  4. Nitisha
  5. Prem Kumar
  6. Gyan Dassi
  7. Devi Chand
  8. Kumari Radhika
  9. Bhupender
  10. Kamlesh Kumar
  11. Lakshman Thapa
  12. Vijay Kumar

Two others were yet to be identified. The state government has announced ex-gratia of Rs 4 lakh to the kin of the deceased and Rs 5o thousand to the injured. HRTC has also announced Rs. 1 lakh ex-gratia to the passengers of the bus killed in the mishap. 

Further, Chief Minister Jairam Thakur and several other political leader visited the spot and met the relatives of victims on Thursday. 

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Kinnaur Tragedy: HRTC Bus Wreckage Found, Death Toll Rises to 13 and Likely Rise

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Kinnaur HRTC Bus wreckage

Kinnaur-The rescue operation at the site of the landslide in Nigulsari, Nichar Tehsil of the Kinnaur district, was resumed on Thursday morning. The wreckage of the ill-fated bus of the HP Road Transport Corporation was found 500 meters below the road and about 200 meters above the Sutlej River. The pictures showed that the bus was completely crushed and torn to pieces. 

So far, 13 dead bodies had been recovered and 14 injured including the driver and the conductor of the HRTC bus, which was on its way from Reckong Peo to Haridwar, were rescued and taken to hospital. The death toll is likely to rise as the passengers were yet to be traced. According to the driver, there were 25-30 passengers in the bus when it was hit by the landslide. A Bolero SUV alongwith passengers was also missing and was yet to be traced.  

Kinnaur rescue operation resumes

The mishap occurred at about 12:30 pm on Wednesday. The rescue operation was suspended at 9 pm due to dark conditions and shooting stones, which made the rescue operation difficult.

Till the suspension of the operation, the rescue teams comprising of NDRF, ITBP, Home-Guards, Central Industrial Security Force, and local police had traced three cars and a tipper.  

The rescue teams were searching from two directions and were using drones too.   

Kinnaur tragedy drone picture

The landslide had hit about 200 meters patch of the National Highway-5 – about 10 kilometres away from Bhavanagar.

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Kinnaur Tragedy: 10 Bodies Recovered, Still No Trace of HRTC Bus, 50-60 Persons Feared to be Missing

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Kinnaur tragedy drone picture

Kinnaur: The rescue operation at the site of the landslide in Nigulsari, Nichar Tehsil of the Kinnaur district, was suspended at 9 pm on Wednesday due to dark conditions and shooting stones, which made the rescue operation difficult. The rescue operation would be resumed on Thursday morning, according to the information provided by the district administration.

So far, 10 dead bodies, including those of five women and a child, had been recovered and 13 injured were rescued and taken to CHC Bhavnagar. Though the exact number was not known, 50-60 persons were feared to be buried and were yet to be traced.  

Kinnaur rescue operation pictures 7

Source: ITBP

The rescue teams comprising of state NDRF, ITBP, Home-Guards, Central Industrial Security Force, and local police had been carrying out the rescue operation aggressively.

The HRTC bus carrying 25-30 passengers and a Bolero SUV were still untraceable. As earth removers removed the rubble, two cars and a truck were traced, but the bus and the SUV weren’t found beneath the rubble. It’s being suspected that rubble and boulders might have pushed the bus and the SUV down the gorge and into the Sutlej River.

Kinnaur rescue operation pictures 5

Source: ITBP

The HRTC bus and a utility vehicle (a Bolero) and their passengers have not been found under the debris. They are still untraceable. Both vehicles may have rolled down with the debris,” informed Director, State Disaster Management Force, Sudesh Kumar Mokhta.

The rescue teams were searching from two directions and were using drone too, informed Deputy Commissioner, Kinnaur, Abid Hussain Sadiq.    

Kinnaur rescue operation pictures

Source: ITBP

The landslide had hit about 200 meters patch of the National Highway-5 – about 10 kilometers away from Bhavanagar. The ill-fated bus was reportedly on its way from Reckong Peo to Haridwar in Uttarakhand via Shimla.

Kinnaur tragedy drone picture

Source: ITBP

The survivors included the drivers of the bus, Mahender Pal, who had first informed his higher officials about the landslide, and the conductor, Gulab Singh.

Meanwhile, ex-gratia of Rs 2 lakh was announced for the kin of the deceased and Rs 50 thousand for the injured.

Kinnaur rescue operation pictures 3

Source: ITBP

The landslide has again stirred a debate over ecological damages to the fragile Himalayan region due to rampant blasting and tunneling for hydropower projects and cutting of hills for the widening of roads in an unscientific manner. As compared to the previous year, landslides and cloudbursts doubled in 2o21.

Earlier, on July 25, a landslide had claimed nine lives after boulders rolling down a hill hit a tourist vehicle on Sangla-Chitkul NH in the Batseri region in Kinnaur district. 

According to the statement given in the Legislative Assembly, the ongoing monsoon session has claimed 212 lives and caused damages worth over Rs. 500 crores. The death tally would rise as the rescue operation would be resumed tomorrow.

Kinnaur rescue operation pictures 2

Source: ITBP

Kinnaur rescue operation pictures 6 Kinnaur rescue operation pictures 4

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