New Delhi: The Narendra Modi government on Wednesday evening announced that it would reduce the Central excise duty on petrol and diesel by Rs 5 and Rs 10.
The move comes after sharp criticism of the Union government’s strategy of maintaining high fuel taxes throughout the pandemic as a means of shoring up the Indian government’s fiscal deficit.
Various Bharatiya Janata Party (BJP) leaders and ministers have made questionable defences of the move, calling it a necessary step in providing everything from infrastructure financing to funding the rollout of free COVID-19 vaccines.
In India, Central and state taxes together make up anywhere between 50% to 60% of the retail price of petrol and diesel.
In the past few months, the prices of petrol and diesel have hit record highs across the country.
On Wednesday, the price of petrol in Delhi stood at Rs 110.04 per litre while diesel was available for Rs 98.42. In Mumbai, petrol was retailing at Rs 115.85 while diesel cost Rs 106.62.
“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 government said in a press release.
“…The reduction in excise duty on Petrol and Diesel will also boost consumption and keep inflation low, thus helping the poor and middle classes. Today’s decision is expected to further spur the overall economic cycle,” it added.