Fin Min not in favour of excise duty hike on diesel cars

CNBC-TV18 learns from finance ministry sources that they are currently not in favour of a hike in excise duty, reports Aakanksha Sethi.

Oil Minister S Jaipal Reddy has written to finance ministry seeking a hike in excise duty on diesel cars as an alternative to hike in diesel prices and in order to reduce the differential between petrol and diesel cars. However, the finance ministry is not keen at this point in time because they feel that the revenue that they will get from a hike in excise duty will be only Rs 5,000 crore. On the other hand, they will harm auto sector, which is not appropriate at this point in time because April IIP has been at 0.1%. They also feel that other sectors like telecom and power generation use far more diesel than the automobile sector. If there is a need for a hike in excise duty, it should be on these sectors instead of diesel cars. Sources say Heavy Industries Minister Praful Patel has already opposed the Oil Minister's proposal, and will take up the issue with the Finance Minister. The final call on the proposal, which is under examination, will be taken once auto car manufactures submit data on investment and demand today.