Union Finance Minister Nirmala Sitharaman on Saturday announced the reduction of excise duty on petrol and diesel along with other measures to ease the burden of high inflation on people.
Sitharaman announced a reduction of excise duty of Rs 8 per litre on petrol and Rs 6 on diesel, which she said would lower the price of petrol by Rs 9.5 per litre and diesel by Rs 7 per litre. She also urged states to cut their share of fuel revenue too.
"I wish to exhort all state governments, especially the states where reduction wasn’t done during the last round (November 2021), to also implement a similar cut and give relief to the common man," said Sitharaman.
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Earlier at an interaction with chief ministers, Prime Minister Modi had said some states did injustice to their people by not reducing state taxes when the Centre reduced excise duty on fuel last November.
She also announced a subsidy of Rs 200 per gas cylinder to over 9 crore beneficiaries of Pradhan Mantri Ujjwala Yojana. The subsidy would be applicable on up to 12 cylinders.
The fuel excise duty reduction will have revenue implication of around Rs 1 lakh crore a year for the government, whereas the gas cylinder subsidy will cost the government Rs 6,100 crore a year, said Sitharaman.
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The Centre has also taken steps to reduce the final prices of plastic products, iron, and steel, and to increase the availability of cement, said Sitharaman.
She announced the reduction of customs duty on raw materials and intermediaries for plastic products where Indian import dependence is high. She also announced calibration of customs duty on raw materials and intermediaries for iron and steel to reduce their prices.
Moreover, import duty on some raw materials of steel will be reduced, whereas export duty on some steel products will be levied to maintain favourable prices, said Sitharaman.
She added, "Measures are being taken up to improve the availability of cement and through better logistics to reduce the cost of cement."
These announcements have come after wholesale price-based inflation soared to a record high of 15.08 per cent in April on soaring prices across various segments from food to commodities.
Explaining the situation, Sitharaman cited Covid-19 recovery and the Ukraine war, saying, "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."
Prime Minister Narendra Modi on fuel price cut said: 'It is always people first for us'.
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PM Modi said that people are the first priority for his government.
"It is always people first for us! Today's decisions, especially the one relating to a significant drop in petrol and diesel prices will positively impact various sectors, provide relief to our citizens and further 'Ease of Living'," PM Modi tweeted.
The decision to give a Rs 200 subsidy per cylinder to beneficiaries of the Ujjwala scheme was also highlighted by the prime minister.
"Ujjwala Yojana has helped crores of Indians, especially women. Today's decision on Ujjwala subsidy will greatly ease family budgets," he said.
The excise duty cut will translate into a reduction of Rs 9.5 a litre on petrol and Rs 7 a litre in diesel after taking into account its impact on other levies.
