Actually the author is wrong to say that ONGC etc. are giving taxes. Literally it is not tax. It comes under several duties, i.e., import duties. Taxes are paid over operating profit or expenditure. But duties are paid over transaction.
Then why govt. prefer duties over tax? Duties are uniform. So if there are private companies for a certain kind of business, say oil and gas, then govt. can first apply heavy duties, say around 20% for petroleum products. Then all the companies will make loss as the pricing is controlled by the govt. aka petroleum ministry. Secondly, govt. will give subsidy to the ill financed govt. controlled bodies like ONGC, HP, BP etc whereas private sector players wont avail this benefit. So basically, govt. is monopolizing the petroleum industry indirectly. Practicing such business policy is illegal in US, EU, Japan etc. whereas in India this is legal. You may see the closure of all the reliance retail outlet for petroleum products as they paid duties (uniform to all) and did not get the subsidy as a loss making unit.
