In a major announcement on the eve of Diwali, the Centre on Wednesday slashed the excise duty on petrol and diesel by Rs 5 and Rs 10 respectively. The reduction will boost consumption and keep inflation low, thus helping the poor and the middle classes, the finance ministry said in a statement.
The government has also urged states to reduce the value-added tax (VAT) on petrol and diesel to give further relief to consumers.
“The reduction in excise duty on diesel will be double that of petrol. The Indian farmers have, through their hard work, kept the economic growth momentum going even during the lockdown phase and the massive reduction in excise on diesel will come as a boost to the farmers during the upcoming Rabi season,” the statement said.
The ministry noted that crude oil prices have witnessed a global upsurge in the recent months. “Consequently, domestic prices of petrol and diesel had increased in recent weeks exerting inflationary pressure.”
The ministry, however, said that the government had made efforts to ensure that there is no energy shortage in the country and that commodities such as petrol and diesel are available adequately to meet our requirements.
“Driven by the enterprising ability of India’s aspirational population, the Indian economy has witnessed a remarkable turnaround post the COVID-19 induced slowdown. All sectors of the economy – be it manufacturing, services or agriculture – are experiencing significant upward economic activity,” it said.
