Deora fuels NCP-Cong war

MUMBAI: Union petroleum minister Murli Deora’s unilateral announcement that the state government will cut sales tax on petrol and diesel will stoke the simmering differences between the ruling alliance partners — Congress and Nationalist Congress Party (NCP).

A veteran Congressman, Mr Deora on Friday landed himself, rather unwittingly, on the NCP turf by touching on the tricky issue of a sales tax cut. The state finance department is with the Sharad Pawar-led NCP and it’s unlikely that Mr Deora’s sweeping statement will be taken gently.

Mr Deora has made his statement at a time when the state finance minister Jayant Patil, is abroad and is yet to give a go-ahead to the proposed tax cut.

The union minister’s edict that the state will reduce the sales tax on petrol and diesel came as a surprise to many in the government since the proposal is yet to be cleared by Vilasrao Deshmukh’s Cabinet. “How can he announce even before the Cabinet decides on it,” said an angry NCP minister, responding to Mr Deora’s statement.

For the resource-starved state, the issue is more than politics. For the state the proposed sales cut would mean foregoing as much as Rs 400 crore in revenues.

“Lowering the duty will cost the state Rs 400 crore. This has to be factored in while planning a cut,” a finance ministry official said. “We can understand the political exigency but the state’s revenue is a different issue,” he said.

With Mr Deora’s statements having hit the headlines, Congressmen in the state Cabinet are expected to face angry alliance members when the Cabinet meets on Wednesday. The NCP ministers are thinking of a strategy to delay, if not scrap, the proposal.

This comes in the wake of a recent tiff between the two alliance partners. The state Congress chief Prabha Rau had recently accused the NCP of not following the “coalition dharma” when it fielded industrialist Rahul Bajaj to Rajya Sabha against Congressman Avinash Pande.

The Sharad Pawar-led outfit retaliated by asking Congress to walk out of alliance if it thinks the NCP is not observing coalition discipline. RR Patil, an NCP veteran, while reacting to Ms Rau’s criticism said in no uncertain terms that it is up to the Congress to continue with the alliance.

According to the NCP, it is the Congress that is undermining it. The party is upset since the neo-convert Congressman Narayan Rane engineered a split in Nationalist Congress Party’s vote in the recent legislative council elections.