Telangana government loses Rs 500 crore as petrol price goes down

Hyderabad: Reduction in prices of petrol and diesel since August this year may have brought relief to people, but it has resulted in heavy losses to the Telangana and Andhra Pradesh governments.

The Telangana government has lost nearly Rs 500 crore so far due to reduced VAT, while AP had lost nearly Rs 700 crore.

The total loss for TS for the financial year 2014-15 has been pegged at Rs 1,500 crore, while for AP, it will be Rs 2,000 crore going by the current prices.

Since August 1, the price of petrol has come down from Rs 80.41 per litre to the current Rs 67.02 and diesel from Rs 63.04 to Rs 55.02.

“VAT contributes 70 per cent of the total revenues. The government will have to look at other resources to increase revenues,” said Talasani Srinivas Yadav, minister for commercial taxes.

Finance minister  Etela Rajendar said, “The Centre is now planning to bring in GST (Goods and Services Tax) in place of VAT from 2015-16. We are seeking exemption for petrol, diesel and liquor from the ambit of GST.”