RBI governor on Petrol-Diesel price: Advised cut in in-direct tax PSU NEWS

 

"Pump prices of petrol and diesel have reached historical highs. An unwinding of taxes on petroleum products by both the centre and the states could ease the cost-push pressures."

RBI governor on Petrol-Diesel price: Advised cut in in-direct tax

 

New Delhi: The Governor of Reserve Bank of India Shri Shaktikanta Das on Monday while chairing Monetary Policy Committee Meeting mentioned the continuous rise in the price of crude oil, due to which the rates of petrol and diesel are increasing, he said.  Inflation is being affected due to price rise. Transportation cost has increased, due to which its heat is reaching every sector. At the same time, state governments have also started cutting VAT and other taxes on petrol and diesel. It is now expected that due to reduction in indirect tax, the rising prices of petrol and diesel can be controlled not only in some states but across the country.

He suggested a cut in in-direct tax to cut the price of petrol and diesel. At present, 60 percent of the retail price of petrol is taxed, while diesel has 54 percent tax. The major part of the price of petrol is the excise duty levied by the Center and the VAT levied by the state. The price has been continuously increasing for some time, due to which petrol in many cities of the country and diesel is being sold beyond Rs. 90.

Shri Das said CPI inflation excluding food and fuel remained elevated at 5.5 percent in December, due to the inflationary impact of rising crude oil prices and high indirect tax rates on petrol and diesel, and pick-up in inflation of key goods and services, particularly in transport and health categories. Proactive supply-side measures, particularly in enabling a calibrated unwinding of high indirect taxes on petrol and diesel – in a co-ordinated manner by centre and states – are critical to contain the further build-up of cost-pressures in the economy.

It was also mentioned, "Pump prices of petrol and diesel have reached historical highs. An unwinding of taxes on petroleum products by both the centre and the states could ease the cost-push pressures. What is needed at this point is to create conditions that result in a durable disinflation. This is contingent also on proactive supply-side measures. "



Posted Date :  23-02-21

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