So you are telling me to first decrease the petroleum prices by reducing the tax on these products and then increase the reduced prices by deregularising the prices. All this is going to do is cancel out each other.
Bro how come there would be huge hole when i am saying deregulate all petroleum prices and decrease the taxes which around 40 percent along with additional 14.35 Rs as fixed excise tax which is among the highest in any country and ofcourse high prices of petroleum product would definitely reduce growth of indian economy significantly.
First of all, we import 70% of our petroleum products, which is already burning a huge hole in govt's pocket. On top of that, you are proposing to reduce the prices of the products to increase the consumption. Which would mean even higher import of these products plus taking into consideration that amount of money govt is going to lose with lesser taxes. More import is never the answer in my opinion.
Whats wrong with that, as it would rejuvenate automobile industry, which would in turn help whole economy. In my opinion Automobile industry is the only industry, which can revive rubber industry, tourism, real estate, aluminum, plastic. And if tax petroleum is decreased, it would help agriculture and fertilizer industry too. decreases electricity prices which would affect business too. Decrease in petroleum prices would decrease inflation and decrease commodities prices. yes if more import means that all benefit i am all in for more import of petroleum.
Why would you want to increase the usage of something, of which large propotions are being imported from foreign countries?
@ Livery: I don't support reducing subsidies, i think we should reduce taxes and i support your point of that govt should think of increasing income rather than reducing expenses to large extent except scraping projects like MNREGA and food security bill.
Govt should reduce bureaucratic interference. and reforms should be done. Setting up business should be easy here so more tax can be generated. if we decrease tax on petroleum products, their usage will increase tremendously and hence turnover can be increased.
If we reduce subsidies as well as reduce tax on the essential commodities, aren't they gonna cancel each other out. As reducing the taxis eventually going to reduce govt's income. Although I do agree that White elephant projects like MNREGA have to go.
But I think reducing the budget deficit is not possible in short term plan. The focus should be on increasing the income on the govt rather than decreasing the expenditure as we all know that austerity is never an answer. Govt needs to spend to earn the taxes. GOvt should focus on developing the infrastructure to reap the benefits of this development in long term.
@goyalsachin said:one efficient way would be to eliminate unwarranted subsidies given on diesel , kerosene nd cooking gas gradually...when d govt started these subsidies back in 03 through budget..they didn't think tht this will mount arnd 400 billion rs ...bt now oil marketing companies r sharing this burden now...If d govt can gradually increase ratesof diesel..nd bring its price acc to international level...also by enlisting d real poor..govt can do d job...
What all permissions are needed to set up a business in India? (old IIFT GDPI question)