Cess on diesel, petrol, and electricity will fuel Punjab’s infrastructure development, both in urban and rural areas ahead of the Assembly polls in February 2017. The Punjab Government, during its Cabinet meeting on Wednesday gave a go-ahead to levy Rs1 cess per litre on petrol and diesel, besides five per cent cess on electricity and one per cent on property registration — a move expected to generate additional revenue of about Rs1,400 crore annually.
With the amount, the Government has decided to carry out the “much needed” infrastructure development works across the State, including 140 towns in urban areas and 12,000 villages in rural segments, to provide all the basic civic amenities and facilities to citizens. The decision will further push the cost of petrol, diesel and electricity upwards in the State. Even as the State Power Regulator has given a nominal relief of just four paise to Punjab’s power consumers, the Power Corporation had, of late, levied Fuel Cost Adjustment (FCA) surcharge at a rate of four paise per unit each for metered category (domestic, industrial segments) and Rs2 per BHP (brake horsepower) per month for unmetered category (farming sector) leading to hike in power tariff.
Moreover, the diesel and petrol prices were increased, only recently, by Rs2.71 per litre and Rs3.13 per litre respectively. As of now, diesel price in Punjab is Rs52.56 to Rs52.13 per litre, varying due to local taxes in different cities — one of the lowest in the country, as claimed by State Deputy Chief Minister Sukhbir Badal on Wednesday. On the other hand, Punjab is among the most expensive State in terms of petrol.
Justifying the Government’s move to impose cess, Sukhbir said: “We have created an investment centre and the amount thus collected would be used for the infrastructure development of the urban and rural areas.” “Since past one year, we have been on the job…We have formed teams that have surveyed the entire State. There are a lot of towns which don’t have basic infrastructure…and for that, we need Rs5,000 crore to provide them with sewerage, roads, lighting, etc,” said Sukhbir, adding that to generate funds for that, the cess has been levied.
The funds would be collected under the Punjab Infrastructure Development Board (PIDB) which would be responsible to carry out the work. “Funds would be collected under three heads…five per cent cess on electricity on all categories of consumers, one percent cess on property registration charges, and Rs1 on diesel and petrol…this would generate around Rs1,500 crore revenue and we need about Rs9,000 crore total to change the infrastructure of the entire State,” he said.
As per the Cabinet decision, the infrastructure development (ID) fee has been increased from the existing Rs1 to Rs2 per litre on the sale of petrol and levying Rs1 per litre ID fee on the sale of diesel within the State. Besides, ID fee at the rate of Rs5 per Rs100 of value of electricity consumed and at the rate of 1 per cent on the purchase of immovable property within Punjab has also been imposed. “It will be an open tender process. We have asked the state’s local Bodies department to state inviting tenders as we have plans prepared for the same, and August 1 has been fixed a deadline for tenders for 140 towns. By August 15 and September, we have targeted to start the construction work,” he said.
Sukhbir said that the tenders would be a composite one, that is, one company would be allotted to carry out the entire work, including sewerage, roads, lighting, water supply, and the same company would maintain it for the next 10 years. “Our target is to complete the project in one to one-and-a-half year, but we are also taking the slip of three to four months,” he said. In a candid admission, Sukhbir maintained that no town of Punjab has 100 per cent facilities. SAD, in alliance with the BJP, has been running the Government since 2007.