In news that comes as a relief to the common man, the Centre has decided to cut excise duty on petrol by Rs 8 per litre and on Diesel by Rs 6 per litre. This will effectively reduce the price of petrol by Rs 9.5 per litre and of diesel by Rs 7 per litre.
Finance Minister Nirmala Sitharaman, while making the announcement on her Twitter handle on May 21, requested state governments to follow the lead, especially those who didn't announce a reduction last time (Novemeber 2021).
"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", read her tweet.
Up until the morning of May 21, petrol and diesel prices remained stable for about 40 days. Since the end of a four-and-a-half-month-long halt in rate revision on March 22, rates of petrol and diesel increased by Rs 10 a litre each through 14 revisions. Fuel prices were last hiked on April 6 by 80 paise a litre each.
The Finance Minister also apprised that the government will give a subsidy of Rs 200 per gas cylinder (upto 12 cylinders) to over 9 crore beneficiaries of Pradhan Mantri Ujjwala Yojana.
Also Read: India’s inflation heat: Soaring prices put pressure on government, RBI to act
Revenue implication for the excise duty cut will be around Rs 1 lakh crore per year, while the subsidy on LPG cylinders of the Ujjwala Yojana will cost the exchequer Rs 6,100 crore per year, the minister added.
Other decisions announced by the FM included the calibration of customs duty on raw materials & intermediaries for iron & steel to reduce their prices. The import duty on some raw materials of steel will be reduced and export duty on some steel products will also be levied.
"We are also reducing the customs duty on raw materials & intermediaries for plastic products where our import dependence is high. This will result in reduction of cost of final products", informed the FM's tweet. She also said that measures are being taken to improve the availability of cement and through better logistics to reduce the cost of cement.
Also Read: Fuel prices: TN CM Stalin hits out at PM Modi over tax cuts, says people know the facts
All these decisions come at a time when the common man is dealing with skyrocketing inflation and a volatile stock market. Headline retail inflation surged to 7.79 percent in April - the highest since May 2014. On May 17, India's inflation based on the Wholesale Price Index (WPI) rose further to 15.08 per cent in April from 14.55 percent in March.
At 15.08 percent, the WPI print for April is the highest in the current series, data for which is available starting April 2013. As such, the latest wholesale inflation number is the highest in at least nine years.
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