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Finance Minister Nirmala Sitharaman on Saturday (May 21) took to twitter to announce a series of steps taken by the Narendra Modi government over the past one year- biggest of them in current context being the decision to reduce the central excise duty on Petrol by Rs 8 per litre and on diesel by Rs 6 per litre.
Late in the evening, the government in circular added that India will cut import duty on coal to 0% from 2.5%.
This will reduce the price of petrol by Rs 9.5 per litre and of diesel by Rs 7 per litre. The move will have revenue implication of around Rs 1 lakh crore per year for the government.
“Today, the world is passing through difficult times. Even as the world is recovering from Covid-19 pandemic, the Ukraine conflict has brought in supply chain problems and shortages of various goods. This is resulting in inflation & economic distress in a lot of countries,” she said in a series of tweets.
“While the excise cut on petrol will have revenue implication of around Rs 1 lakh crore per year for the government, subsidy on gas cylinder will cost a revenue Rs6100 crore a year to the exchequer,” categorically highlighted the finance minister.
“Keeping in line with the government’s ‘commitment to help the poor & common man, today, we are announcing more steps to help our people,” read FM’s post.
‘The welcome reduction in excise duty will help to cool the inflation trajectory going ahead, and complement monetary policy. We project the may 2022 cpi inflation at between 6.5-7.0%. The fiscal cost, while material, can be absorbed by higher than budgeted revenues through other taxes. We now estimate the tax revenues of the GoI to surpass the budget estimates by at least Rs. 1.3 trillion even after the excise reduction,” expressed Aditi Nayar, Chief Economist, ICRA._The Economic Times