Senior Congress leader P Chidambaram wondered whether the states can afford to give up revenue from VAT on petrol and diesel unless the Centre devolves more funds or gives them more grants, likening their situation to being between 'the devil and the deep sea'. The former finance minister's remarks come a day after the government announced Rs 8 per litre cut in excise duty on petrol and Rs 6 reduction on diesel.

"The notification on reduction of duty on Petrol and Diesel is now available. FM used the words 'Excise Duty', but the reduction is in Additional Excise Duty which is not shared with the states. Hence, contrary to what I said yesterday, the entire burden of the reduction falls on the Centre. To that extent, I stand corrected," Chidambaram said.