Excise duty on petrol and diesel hiked by Central Government for the third time
Posted on: 04/Jan/2016 12:46:05 PM
The Central Government has hiked the excise duty on petrol and diesel, three times in quick succession. Because of this hike the government will gain an additional Rs 10,000 crore in the financial year. This amount will partly make up for the shortfall in disinvestment receipts and direct tax collections.
The government on Saturday raised excise duty on petrol by Rs 0.37 per litre and by Rs 2 a litre on diesel. However, there will be no increase in retail selling price of petrol and diesel as state-owned oil firms. Basic excise duty on unbranded or normal petrol has been increased from Rs 7.36 per litre to Rs 7.73 and the same on unbranded diesel from Rs 5.83 to Rs 7.83 per litre.
The government has raised excise duty on petrol and diesel three times in last two months and by seven times since November 2014. Taken together with four excise duty hikes between November 2014 and January 2015, levies on petrol has gone up by Rs 10.02 a litre and that on diesel by Rs 9.97 per litre.
The higher realization will come handy to the government to maintain fiscal deficit at 3.9 per cent of GDP in current financial year ending March 2016. The government has targeted to raise Rs 69,500 crore from PSU disinvestment in current fiscal, so far only Rs 12,700 crore has been raised.
Finance Ministry officials have admitted that there would be a shortfall of around Rs 50,000 crore in disinvestment proceeds and about Rs 30,000-40,000 crore in direct taxes, but he expressed optimism that higher realization from indirect taxes as well as non-tax revenues will make up for the deficit. During April-November, indirect tax collections grew by 34 per cent to Rs 4.38 lakh crore. The Finance Ministry is also insisting on higher dividends from the state-owned companies in a bid to garner more non-tax revenue. The Government has already received a dividend of Rs 65,896 crore from RBI.According to the data, fiscal deficit position has shown a marked improvement at the end of November 2015.
The deficit stood at Rs 4.83 lakh crore, or 87 per cent of the Budget Estimate (BE) for the whole 2015-16. This is much better compared to 98.9 per cent deficit recorded in the same period last year.
