The state government is considering the option of hiking value added tax (VAT) on petrol, diesel and gas to compensate the huge losses in government revenue because of the lockdown necessitated because of the Covid-19 pandemic outbreak. However, the government is still weighing its options, as the move could create a backlash and uproar.
The state government has been borrowing heavily to meet its expenses and also pay back existing debt, as its revenues from various quarters have dwindled because of the lockdown.
Sources close to the development said, “As compared to peer group states, our VAT and cess on petrol, diesel and gas are lesser. Due to loss of income because of the lockdown, many states have increased VAT on petrol, diesel and gas.