In an attempt to tackle the rising prices in the country, the government on Saturday announced a slew of measures, including a sharp reduction in excise duty on petrol and diesel and a subsidy for gas cylinders. Finance Minister Nirmala Sitharaman made the announcements in a series of tweets and said the Narendra Modi government is devoted to the welfare of the poor.
The government cut the excise duty on petrol by Rs 8 per litre and diesel by Rs 6. The move will reduce the price of petrol by Rs 9.5 per litre and that of Diesel by Rs 7 Sitharaman said. "It will have a revenue implication of around Rs 1 lakh crore/year for the government," Sitharaman said.
The minister exhorted all state governments, especially the states where reduction was not done during the last round of duty cut in November 2021, to also implement a similar reduction and give relief to the common man.
In another major announcement, Sitharaman said the government will this year give a subsidy of Rs 200 per gas cylinder—upto 12 cylinders—to over 9 crore beneficiaries of the Pradhan Mantri Ujjwala Yojana. "This will help our mothers and sisters. This will have a revenue implication of around ₹ 6100 crore a year," she tweeted.
The minister also announced that the government is reducing the customs duty on raw materials and intermediaries for plastic products where India's import dependence is high. This will result in reduction of cost of final products, she said.
"Similarly we are calibrating customs duty on raw materials and intermediaries for iron & steel to reduce their prices. Import duty on some raw materials of steel will be reduced. Export duty on some steel products will be levied," she tweeted.
In another key step, Sitharaman said measures are being taken up to improve the availability of cement and through better logistics to reduce the cost of cement.
She also claimed that despite rising fertilizer prices globally, India has protected its farmers from such price hikes. “In addition to the fertilizer subsidy of Rs 1.05 lakh crore in the budget, an additional amount of ₹ 1.10 lakh crore is being provided to further cushion our farmers,” she said.
The minister noted that even as the world was recovering from the 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.”
“Despite the challenging international situation,we’ve ensured that there are no shortages/scarcity of essential goods. Even a few developed countries couldn’t escape some shortages/disruptions,” Sitharaman tweeted.
The announcements came at a time when the government is facing widespread criticism from opposition parties over its inflation management. The wholesale price inflation touched a record high of 15.08 per cent in April on price rise across all items. Retail inflation too rose to a near eight-year high of 7.79 per cent in that month, remaining above the RBI's inflation target for the fourth straight month.
After the latest excise cut, the incidence of central tax on petrol will come down to Rs 19.9 a litre and that on diesel to Rs 15.8 per litre. Petrol price in Delhi will cost Rs 95.91 a litre from Sunday as against Rs 105.41 a litre currently while diesel will cost Rs 89.67 a litre as opposed to Rs 96.67 a litre now.
