Mr. Ramnath Kovind completes his tenure as President in July. With the Election Commission of India expected to notify the election dates this week, we look at how India will elect its next President.
As the Head of the State, the President is a key part of Parliament. The President calls the two Houses of Parliament into session on the advice of the Council of Ministers. A Bill passed by the Lok Sabha and Rajya Sabha does not become a law unless assented to by the President. Further, when Parliament is not in session, the President holds the power to sign a law with immediate effect through an Ordinance.
Who elects the President?
The manner of election of the President is provided in Article 55 of the Constitution. Members of Parliament and Members of Legislative Assemblies (MPs and MLAs) including elected representatives from the Union Territories (UTs) of Delhi and Puducherry form the electoral college, which elects the President. At least 50 elected representatives must propose a candidate, who must then be seconded by 50 other electors to run for the President's office. Members of Legislative Councils and the 12 nominated members of Rajya Sabha do not participate in the voting process.
The history behind having proposers and seconders To discourage the practice, candidates had to secure at least 10 proposers and seconders each to contest the elections from the 1974 election onwards. A compulsory security deposit of Rs 2,500 was also introduced. The changes were brought in through an amendment to the Presidential and Vice-Presidential Act, 1952. In 1997, the Act was further amended to increase the security deposit to Rs 15,000 and the minimum number of proposers and seconders to 50 each. |
How are the votes calculated?
The Presidential election uses a special voting to tally the votes. A different voting weightage is assigned to an MP and an MLA. The value of each MLA's vote is determined based on the population of their state and the number of MLAs. For instance, an MLA from UP has a value of 208 while an MLA from Sikkim has 7 (see Table 1). Due to a Constitutional Amendment passed in 2002, the population of the state as per the 1971 census is taken for the calculation.
The value of an MP's vote is the sum of all votes of MLAs across the country divided by the number of elected MPs.
How will the numbers look in 2022?
In the 2017 Presidential elections, electors from 31 states and the UTs of Delhi and Puducherry participated. However, in 2019, with the Jammu and Kashmir (J&K) Reorganization Act, the number of states were reduced to 30. The J&K Assembly was dissolved as per the Act and a new legislature for the UT of J&K is yet to be reconstituted. UTs with legislatures were not originally part of the electoral college for the election of the President. The Constitution was amended in 1992 to specifically include the UTs of Delhi and Puducherry. Note that for MLAs from J&K to participate in future Presidential elections, a similar Constitutional amendment would be required to be passed by Parliament.
Based on the assumption that J&K is not included in the 2022 Presidential election, the total number of votes of MLAs in 2022 elections will have to be adjusted. The 87 Jammu and Kashmir MLAs must be removed from the total number of MLAs of 4,120. Jammu and Kashmir’s contributing vote share of 6,264 must also be reduced from the total vote share of 549,495. Adjusting for these changes, 4,033 MLAs will participate in the 2022 elections and the combined vote share of all MLAs will add up to 543,231.
Table 1: The value of votes of elected MLAs of different states at the 2017 Presidential Election
Name of State |
Number of Assembly seats |
Population (1971 Census) |
Value of vote of each MLA |
Total value of votes for the state (B x D) |
A |
B |
C |
D |
E |
Andhra Pradesh |
175 |
2,78,00,586 |
159 |
27,825 |
Arunachal Pradesh |
60 |
4,67,511 |
8 |
480 |
Assam |
126 |
1,46,25,152 |
116 |
14,616 |
Bihar |
243 |
4,21,26,236 |
173 |
42,039 |
Chhattisgarh |
90 |
1,16,37,494 |
129 |
11,610 |
Goa |
40 |
7,95,120 |
20 |
800 |
Gujarat |
182 |
2,66,97,475 |
147 |
26,754 |
Haryana |
90 |
1,00,36,808 |
112 |
10,080 |
Himachal Pradesh |
68 |
34,60,434 |
51 |
3,468 |
Jammu and Kashmir |
87 |
63,00,000 |
72 |
6,264 |
Jharkhand |
81 |
1,42,27,133 |
176 |
14,256 |
Karnataka |
224 |
2,92,99,014 |
131 |
29,344 |
Kerala |
140 |
2,13,47,375 |
152 |
21,280 |
Madhya Pradesh |
230 |
3,00,16,625 |
131 |
30,130 |
Maharashtra |
288 |
5,04,12,235 |
175 |
50,400 |
Manipur |
60 |
10,72,753 |
18 |
1,080 |
Meghalaya |
60 |
10,11,699 |
17 |
1,020 |
Mizoram |
40 |
3,32,390 |
8 |
320 |
Nagaland |
60 |
5,16,449 |
9 |
540 |
Odisha |
147 |
2,19,44,615 |
149 |
21,903 |
Punjab |
117 |
1,35,51,060 |
116 |
13,572 |
Rajasthan |
200 |
2,57,65,806 |
129 |
25,800 |
Sikkim |
32 |
2,09,843 |
7 |
224 |
Tamil Nadu |
234 |
4,11,99,168 |
176 |
41,184 |
Telangana |
119 |
1,57,02,122 |
132 |
15,708 |
Tripura |
60 |
15,56,342 |
26 |
1,560 |
Uttarakhand |
70 |
44,91,239 |
64 |
4,480 |
Uttar Pradesh |
403 |
8,38,49,905 |
208 |
83,824 |
West Bengal |
294 |
4,43,12,011 |
151 |
44,394 |
NCT of Delhi |
70 |
40,65,698 |
58 |
4,060 |
Puducherry |
30 |
4,71,707 |
16 |
480 |
Total |
4,120 |
54,93,02,005 |
|
5,49,495 |
Source: Election Commission of India (2017); PRS.
The value of an MP’s vote correspondingly will change from 708 in 2017 to 700 in 2022.
Value of one MP's vote = Total value of all votes of MLAs = 543231 = 700
Total number of elected MPs 776
Note that the value of an MP’s vote is rounded off to the closest whole number. This brings the combined value of the votes of all MPs to 543,200 (700 x 776).
What is the number of votes required to win?
The voting for the Presidential elections is done through the system of single transferable vote. In this system, electors rank the candidates in the order of their preference. The winning candidate must secure more than half of the total value of valid votes to win the election. This is known as the quota.
Assuming that each elector casts his vote and that each vote is valid:
Quota = Total value of MP’s votes + Total value of MLA’s votes + 1
2
= 543200 + 543231 +1 = 1086431 +1 = 543,216
2 2
The anti-defection law which disallows MPs from crossing the party line does not apply to the Presidential election. This means that the MPs and MLAs can keep their ballot secret.
The counting of votes takes place in rounds. In Round 1, only the first preference marked on each ballot is counted. If any of the candidates secures the quota at this stage, he or she is declared the winner. If no candidate secures the quota in the first round, then another round of counting takes place. In this round, the votes cast to the candidate who secures the least number of votes in Round 1 are transferred. This means that these votes are now added to the second preference candidate marked on each ballot. This process is repeated till only one candidate remains. Note that it is not compulsory for an elector to mark his preference for all candidates. If no second preference is marked, then the ballots are treated as exhausted ballots in Round 2 and are not counted further.
The fifth Presidential election which elected Mr. VV Giri is the only instance when a candidate did not secure the quota in the first round. The second preference votes were then evaluated and Mr. Giri secured 4,20,077 of the 8,36,337 votes and was declared the President.
The only President of India to win unopposed |
In the past few months, retail prices of petrol and diesel have consistently increased to all-time high levels. On October 16, 2021, the retail price of petrol in Delhi was Rs 105.5 per litre, and that of diesel was Rs 94.2 per litre. In Mumbai, these prices were even higher at Rs 111.7 per litre and Rs 102.5 per litre, respectively.
The difference in fuel retail prices in the two cities is due to the different tax rates levied by the respective state governments on the same products. In this blog post, we look at the tax components in the price structure of petrol and diesel, the variation in these across states, and the major changes in taxation of these products in the recent years. We also discuss changes in the retail prices over the past few years and how it compares vis-à-vis the global crude oil prices.
Taxes make up around 50% of the retail price
Public sector Oil Marketing Companies (OMCs) revise the retail prices of petrol and diesel in India on a daily basis, according to changes in the price of global crude oil. The price charged to dealers includes the base price set by OMCs and the freight price. As on October 16, 2021, the price charged to dealers makes up 42% of the retail price in the case of petrol, and 49% of the retail price in the case of diesel (Table 1).
The break-up of retail prices of petrol and diesel in Delhi (as on October 16, 2021), shows that around 54% of the retail price of petrol comprises central and states taxes. In the case of diesel, this is close to 49%. The central government taxes the production of petroleum products, while states tax their sale. The central government levies an excise duty of Rs 32.9 per litre on petrol and Rs 31.8 per litre on diesel. These make up 31% and 34% of the current retail prices of petrol and diesel, respectively.
Table 1: Break-up of petrol and diesel retail prices in Delhi (as on October 16, 2021)
Component |
Petrol |
Diesel |
||
Rs/litre |
% of retail price |
Rs/litre |
% of retail price |
|
Price Charged to Dealers |
44.4 |
42% |
46.0 |
49% |
Excise Duty (levied by centre) |
32.9 |
31% |
31.8 |
34% |
Dealer Commission (average) |
3.9 |
4% |
2.6 |
3% |
Sales Tax/ VAT (levied by state) |
24.3 |
23% |
13.8 |
15% |
Retail Price |
105.5 |
100% |
94.2 |
100% |
Note: Delhi levies 30% VAT on petrol and 16.75% VAT on diesel.
Sources: Indian Oil Corporation Limited; PRS.
While excise duty rates are uniform across the country, states levy sales tax/ Value Added Tax (VAT) which varies across states. For instance, Odisha levies 32% VAT on petrol, while Uttar Pradesh levies 26.8% VAT or Rs 18.74 per litre, whichever is higher. Refer to the table 3 in annexure for sales taxes/VAT levied across the country. The figure below shows the different tax rates levied by states on petrol and diesel. In addition to the tax rates shown in the graph, many state governments, such as Tamil Nadu, also levy certain additional levies such as cess (Rs 11.5 per litre).
Figure 1: Sales tax/VAT rates levied by states on petrol and diesel (as on October 1, 2021)
Note: The rates shown for Maharashtra are averages of the rates levied in the Mumbai-Thane region and in the rest of the state. Only percentages are being shown in this graph.
Sources: Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas; PRS.
Note that unlike excise duty, sales tax is an ad valorem tax, i.e., it does not have a fixed value, and is charged as a percentage of the price of the product. This implies that while the value of excise duty component of the price structure is fixed, the value of the sales tax component is dependent on the other three components, i.e., price charged to dealers, dealer commission, and excise duty.
Retail prices in India compared to global crude oil price
India’s dependence on imports for consumption of petroleum products has increased over the years. For instance, in 1998-99, net imports of petroleum products were 69% of the total consumption, which increased to around 95% in 2020-21. Because of a large share of imports in the domestic consumption, any change in the global price of crude oil has a significant impact on the domestic prices of petroleum products. The two figures below show the trend in the price of global crude oil and retail prices of petrol and diesel in India, over the last nine years.
Figure 2: Trend of the global crude oil price vis-à-vis retail prices of petrol and diesel (in Delhi)
Note: Global Crude Oil Price is for the Indian basket. Petrol and diesel retail prices are for Delhi. Figures reflect average monthly price.
Sources: Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas; PRS.
Between June 2014 and October 2018, the retail selling prices did not adhere to change in global crude oil prices. The global prices fell sharply between June 2014 and January 2016, and then subsequently increased between February 2016 and October 2018. However, the retail selling prices remained stable during the entire period. This disparity in the change in global and Indian retail prices was because of the subsequent changes in taxes. For instance, central taxes were increased by Rs 11 and 13 between June 2014 and January 2016 on petrol and diesel respectively. Subsequently, taxes were decreased by four rupees between February 2016 and October 2018 for petrol and diesel. Similarly, during January-April 2020, following a sharp decline of 69% in the global crude oil prices, the central government increased the excise duty on petrol and diesel by Rs 10 per litre and Rs 13 per litre, respectively in May 2020.
Sharp increase in excise duty collections
As a result of the increase in excise duty in May 2020, the excise duty collection increased sharply from Rs 2.38 lakh crore in 2019-20 to Rs 3.84 lakh crore in 2020-21. The year-on-year growth rate of excise duty collection increased from 4% in 2019-20 to 67% in 2020-21. However, sales tax collections (from petroleum products) during that period remained more or less constant (Figure 3).
Figure 3: Excise duty and sales tax/ VAT collection from petroleum products (in Rs lakh crore)
Note: The excise duty component in the figure includes cess on crude oil.
Sources: Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas; PRS.
Share of states in excise duty has decreased over the years
Though central taxes (such as excise duty) are levied by the centre, it has only 59% of the revenue from these taxes. The remaining 41% of the revenue is required to be devolved to the state governments as per the recommendations of the 15th Finance Commission. These devolved taxes are un-tied in nature, states can spend them according to their own discretion. The excise duty levied on petrol and diesel consists of two broad components: (i) tax component (i.e., basic excise duty), and (ii) cess and surcharge component. Of this, only the revenue generated from the tax component is devolved to states. Revenue generated by the centre from any cess or surcharge is not devolved to states. Currently, the Agriculture Infrastructure and Development Cess, and the Road and Infrastructure Cess are levied on the sale of petrol and diesel in addition to the surcharge.
In the Union Budget 2021-22, the Agriculture Infrastructure and Development cess on petrol and diesel was announced at Rs 2.5 per litre and Rs 4 per litre, respectively. However, simultaneously, the basic excise duty and surcharge were reduced by equal amounts, so that the overall rate remains the same. Essentially, this provision shifted a revenue of Rs 1.5 per litre of petrol and Rs 3 per litre of diesel from the states’ divisible pool of taxes to the cess and surcharge revenue, which is entirely with the centre. Similarly, over the last four years, the share of tax component in the excise duty has decreased by 40% in petrol and 59% in diesel (table 2). At present, majority of the excise duty levied on petrol (96%) and diesel (94%) is in the form of cess and surcharge, due to which it is entirely under the centre’s share (Table 2).
Table 2: Break up of excise duty (Rs per litre)
Excise duty |
Petrol |
Diesel |
||||||
Apr-17 |
% share of total |
Feb-21 |
% share |
Apr-17 |
% share of total |
Feb-21 |
% share |
|
Tax (devolved to states) |
9.48 |
44% |
1.4 |
4% |
11.33 |
65% |
1.8 |
6% |
Cess and surcharge (centre) |
12 |
56% |
31.5 |
96% |
6 |
35% |
30 |
94% |
Total |
21.48 |
100% |
32.9 |
100% |
17.33 |
100% |
31.8 |
100% |
Sources: Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas; PRS
As a result, the devolution to states out of the excise duty has declined over the last four years. Even though the excise duty collections have increased sharply between 2019-20 and 2020-21, the devolved component has declined from Rs 26,464 to Rs 19,578 (revised estimate) in the same period.
Annexure
Table 3: Sales taxes/VAT rates levied on petrol and diesel across states (as on October 1, 2021)
State/UT |
Petrol |
Diesel |
Andaman & Nicobar Islands |
6% |
6% |
Andhra Pradesh |
31% VAT + Rs.4/litre VAT+Rs.1/litre Road Development Cess an d Vat thereon |
22.25% VAT + Rs.4/litre VAT+Rs.1/litre Road Development Cess and Vat thereon |
Arunachal Pradesh |
20% |
13% |
Assam |
32.66% or Rs.22.63 per litre whichever is higher as VAT minus Rebate of Rs.5 per Litre |
23.66% or Rs.17.45 per litre whichever is higher as VAT minus Rebate of Rs.5 per Litre |
Bihar |
26% or Rs 16.65/Litre whichever is higher (30% Surcharge on VAT as irrecoverable tax) |
19% or Rs 12.33/Litre whichever is higher (30% Surcharge on VAT as irrecoverable tax) |
Chandigarh |
Rs.10/KL cess +22.45% or Rs.12.58/Litre whichever is higher |
Rs.10/KL cess + 14.02% or Rs.7.63/Litre whichever is higher |
Chhattisgarh |
25% VAT + Rs.2/litre VAT |
25% VAT + Rs.1/litre VAT |
Dadra and Nagar Haveli and Daman and Diu |
20% VAT |
20% VAT |
Delhi |
30% VAT |
Rs.250/KL air ambience charges + 16.75% VAT |
Goa |
27% VAT + 0.5% Green cess |
23% VAT + 0.5% Green cess |
Gujarat |
20.1% VAT+ 4% Cess on Town Rate & VAT |
20.2% VAT + 4 % Cess on Town Rate & VAT |
Haryana |
25% or Rs.15.62/litre whichever is higher as VAT+5% additional tax on VAT |
16.40% VAT or Rs.10.08/litre whichever is higher as VAT+5% additional tax on VAT |
Himachal Pradesh |
25% or Rs 15.50/Litre- whichever is higher |
14% or Rs 9.00/Litre- whichever is higher |
Jammu & Kashmir |
24% MST+ Rs.5/Litre employment cess, Reduction of Rs.0.50/Litre |
16% MST+ Rs.1.50/Litre employment cess |
Jharkhand |
22% on the sale price or Rs. 17.00 per litre , which ever is higher + Cess of Rs 1.00 per Ltr |
22% on the sale price or Rs. 12.50 per litre , which ever is higher + Cess of Rs 1.00 per Ltr |
Karnataka |
35% sales tax |
24% sales tax |
Kerala |
30.08% sales tax+ Rs.1/litre additional sales tax + 1% cess |
22.76% sales tax+ Rs.1/litre additional sales tax + 1% cess |
Ladakh |
24% MST+ Rs.5/Litre employment cess, Reduction of Rs.2.5/Litre |
16% MST+ Rs.1/Litre employment cess , Reduction of Rs.0.50/Litre |
Lakshadweep |
Nil |
Nil |
Madhya Pradesh |
33 % VAT + Rs.4.5/litre VAT+1%Cess |
23% VAT+ Rs.3/litre VAT+1% Cess |
Maharashtra – Mumbai, Thane , Navi Mumbai, Amravati & Aurangabad |
26% VAT+ Rs.10.12/Litre additional tax |
24% VAT+ Rs.3.00/Litre additional tax |
Maharashtra (Rest of State) |
25% VAT+ Rs.10.12/Litre additional tax |
21% VAT+ Rs.3.00/Litre additional tax |
Manipur |
32% VAT |
18% VAT |
Meghalaya |
20% or Rs15.00/Litre- whichever is higher (Rs.0.10/Litre pollution surcharge) |
12% or Rs9.00/Litre- whichever is higher (Rs.0.10/Litre pollution surcharge) |
Mizoram |
25% VAT |
14.5% VAT |
Nagaland |
25% VAT or Rs. 16.04/litre whichever is higher +5% surcharge + Rs.2.00/Litre as road maintenance cess |
16.50% VAT or Rs. 10.51/litre whichever is higher +5% surcharge + Rs.2.00/Litre as road maintenance cess |
Odisha |
32% VAT |
28% VAT |
Puducherry |
23% VAT |
17.75% VAT |
Punjab |
Rs.2050/KL (cess)+ Rs.0.10 per Litre (Urban Transport Fund) + 0.25 per Litre (Special Infrastructure Development Fee)+24.79% VAT+10% additional tax on VAT |
Rs.1050/KL (cess) + Rs.0.10 per Litre (Urban Transport Fund) +0.25 per Litre (Special Infrastructure Development Fee) + 15.94% VAT+10% additional tax on VAT |
Rajasthan |
36% VAT+Rs 1500/KL road development cess |
26% VAT+ Rs.1750/KL road development cess |
Sikkim |
25.25% VAT+ Rs.3000/KL cess |
14.75% VAT + Rs.2500/KL cess |
Tamil Nadu |
13% + Rs.11.52 per litre |
11% + Rs.9.62 per litre |
Telangana |
35.20% VAT |
27% VAT |
Tripura |
25% VAT+ 3% Tripura Road Development Cess |
16.50% VAT+ 3% Tripura Road Development Cess |
Uttar Pradesh |
26.80% or Rs 18.74/Litre whichever is higher |
17.48% or Rs 10.41/Litre whichever is higher |
Uttarakhand |
25% or Rs 19 Per Ltr whichever is greater |
17.48% or Rs Rs 10.41 Per Ltr whichever is greater |
West Bengal |
25% or Rs.13.12/litre whichever is higher as sales tax+ Rs.1000/KL cess – Rs 1000/KL sales tax rebate (20% Additional tax on VAT as irrecoverable tax) |
17% or Rs.7.70/litre whichever is higher as sales tax + Rs 1000/KL cess – Rs 1000/KL sales tax rebate (20% Additional tax on VAT as irrecoverable tax) |
Sources: Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas; PRS.