Petrol, diesel excise cut: Fiscal stress staring at India; can Centre, states have the guts to tackle it?
6 years, 3 months ago

Petrol, diesel excise cut: Fiscal stress staring at India; can Centre, states have the guts to tackle it?

Firstpost  

Post the petrol, diesel, excise cut, how the Centre manages to stick to the fiscal deficit target of 3.3 percent is going to be interesting to watch Just about a month earlier, the government was firm about not cutting excise duty on petrol and diesel even as global crude prices rose almost every day. In fact, some would argue that given the rising current account deficit, the government should probably have let retail prices remain high in order to curb consumption of petrol and diesel. First, remember the excise cut by the central government has been accompanied by announcements by various state governments of cuts in state duties on petrol and diesel. How the Centre manages to stick to the fiscal deficit target of 3.3 percent is going to be interesting to watch, given that there are going to be pre-election pressures on the expenditure front.

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History of this topic

RBI flags concerns over state sops even as tax revenue grows, spending quality improves
3 weeks, 5 days ago

RBI flags concerns over state sops even as tax revenue grows, spending quality improves

Live Mint  

Mumbai: India’s banking regulator has flagged concerns about a slew of sops announced by several states, even as their tax revenue has grown faster than the economic growth rate after the pandemic year of FY21, and spending quality improved in favour of more productive asset creation. Even as capital expenditure is projected to increase this year, states are expected to …

RBI flags concerns over state sops even as tax revenue grows, spending quality improves
3 weeks, 5 days ago

RBI flags concerns over state sops even as tax revenue grows, spending quality improves

Live Mint  

Mumbai: India’s banking regulator has flagged concerns about a slew of sops announced by several states, even as their tax revenue has grown faster than the economic growth rate after the pandemic year of FY21, and spending quality improved in favour of more productive asset creation. Even as capital expenditure is projected to increase this year, states are expected to …

Measures to make T.N. revenue-neutral to be keenly watched
1 year, 9 months ago

Measures to make T.N. revenue-neutral to be keenly watched

The Hindu  

Apart from the anticipation of an announcement on the monthly honorarium of ₹1,000 for women family heads, measures to achieve the goal of making the State revenue-neutral in three years would be keenly watched in the Tamil Nadu Budget for 2023-24 to be presented by Finance Minister Palanivel Thiaga Rajan on Monday. As per the provisional figures of the Comptroller …

DC Edit | Time to bring petroleum products under GST ambit
1 year, 10 months ago

DC Edit | Time to bring petroleum products under GST ambit

Deccan Chronicle  

Union finance minister Nirmala Sitharaman was speaking on behalf of most Indians on the biggest reform they would like to see implemented immediately when she spoke of the Central government, under Prime Minister Narendra Modi’s leadership, being willing to bring petroleum products, including petrol and diesel, under the ambit and framework of the Goods and Services Tax, if a consensus …

Kerala Budget will push people to further suffering: BJP
1 year, 11 months ago

Kerala Budget will push people to further suffering: BJP

The Hindu  

BJP State general secretary C. Krishnakumar said here on Friday that the State Budget would push the people into further suffering. Kerala has become the State to charge the highest price for petrol and diesel in the country,” said Mr. Krishnakumar. The government, the BJP leader said, is pushing the people to further depths of suffering by increasing taxes. Mr. …

Reading the Union Budget with state govt spending statistics
1 year, 11 months ago

Reading the Union Budget with state govt spending statistics

Hindustan Times  

Finance minister Nirmala Sitharaman will present her fifth consecutive budget on February 1 this year. See Chart 1: Share of central and state spending in total government expenditure in India There was no significant increase in states’ fiscal deficit post-pandemic The union government’s fiscal deficit has seen a sharp increase in the wake of the pandemic. See Chart 2: centre …

Why it’s time to worry about state finances
2 years, 6 months ago

Why it’s time to worry about state finances

Live Mint  

State governments are confronting various fiscal risks, particularly heavy debt, says the Reserve Bank of India’s latest bulletin. However, a rising trend in providing freebies such as free power, water, and gender-based free bus rides in many states have eaten into the expenditure pie. Power sector accounts for a large portion of states’ financial burden, since dues owed by discoms …

Several states showing warning signs of stress; need to take corrective actions, says RBI article
2 years, 6 months ago

Several states showing warning signs of stress; need to take corrective actions, says RBI article

Firstpost  

The article was prepared by a team of economist under the guidance of deputy governor Michael Debabrata Patra Mumbai: Referring to economic crisis in Sri Lanka, a Reserve Bank article on Thursday said states are showing warning signs of building stress, and the five most indebted ones – Punjab, Rajasthan, Bihar, Kerala and West Bengal – need to take corrective …

Turbulence ahead for fiscal federalism
2 years, 7 months ago

Turbulence ahead for fiscal federalism

Hindustan Times  

June is a watershed moment in the history of fiscal federalism in India. It marks the end of the five-year period for which state governments were entitled to a guaranteed 14% growth in their revenues after the implementation of the Goods and Services Tax. Some states could suffer larger losses, as GST is a consumption-centric tax and penalises states which …

Data Point | Explaining India’s recent fuel tax cuts
2 years, 7 months ago

Data Point | Explaining India’s recent fuel tax cuts

The Hindu  

It’s a relief that the Union government has cut the fuel tax. A look at the developments that preceded the recent excise duty cuts: After weeks of incremental increases in fuel prices, Union Finance Minister Nirmala Sitharaman announced that the Union government is slashing fuel taxes. Her point was that the cut of Rs 8 per litre came from the …

India trims taxes on fuel, commodities to fight inflation
2 years, 7 months ago

India trims taxes on fuel, commodities to fight inflation

Al Jazeera  

The steps will lead to a drop in annual revenues due to lower collections, raising concerns on India’s fiscal deficit. Finance Minister Nirmala Sitharaman announced on Saturday a cut in excise duty on petrol by 8 rupees per litre and 6 rupees per litre on diesel. The new tax regime on petrol and diesel could result in the government losing …

Many States reluctant to cut fuel tax
2 years, 7 months ago

Many States reluctant to cut fuel tax

The Hindu  

The Maharashtra government pared its value added tax levies on petrol and diesel by ₹2.08 and ₹1.44 per litre respectively on Sunday, a day after criticising the Centre for offering minimal tax cuts after drastic hikes over its tenure, a sentiment echoed by most Opposition-ruled States. After announcing the excise duty cuts on petrol and diesel of ₹8 and ₹6 …

Uttar Pradesh, other States should slash VAT on petrol, diesel: BSP chief Mayawati
2 years, 7 months ago

Uttar Pradesh, other States should slash VAT on petrol, diesel: BSP chief Mayawati

The Hindu  

With the Centre slashing the excise duty on petrol and diesel, Bahujan Samaj Party chief Mayawati on May 22 said it was the duty of not only Uttar Pradesh but also of other States to immediately announce a cut in VAT on fuel. Petrol price on May 22 was slashed by ₹8.69 a litre and that of diesel by ₹7.05 …

The big picture on fuel taxation
2 years, 8 months ago

The big picture on fuel taxation

Hindustan Times  

Prime minister Narendra Modi’s remarks on April 27, where he named some non-Bharatiya Janata Party ruled states and asked them to bring down taxes on petrol-diesel have expectedly created a political controversy. Data from the ministry of petroleum shows that most BJP ruled states seem to have a lower tax on petrol and diesel than the states Mr Modi named …

Fuel price cut in consonance with national mood
3 years, 2 months ago

Fuel price cut in consonance with national mood

New Indian Express  

Strange, but fuel prices have the duality of bringing fortune and misfortune. Interestingly, despite the surging pump prices, an IMF official recently recommended maintaining existing fuel taxes in India, as a reduction disproportionately benefits higher-income households, making it ‘highly regressive’. Truth is, the chasm between headline and household inflation is wide and the Centre’s pick to go with the latter …

Fuel price: 22 states reduce VAT on petrol, diesel. Check revised rates
3 years, 2 months ago

Fuel price: 22 states reduce VAT on petrol, diesel. Check revised rates

India TV News  

Following the centre's decision to reduce the excise duty on Petrol and Diesel by Rs. The total increase in petrol price since the May 5, 2020 decision of the government to raise excise duty to record levels had totalled Rs 38.78 per litre. Based on April to October consumption numbers, the loss of revenue to the government due to the …

Kerala firm on not reducing VAT on fuel prices, says state is in 'grim financial situation'
3 years, 2 months ago

Kerala firm on not reducing VAT on fuel prices, says state is in 'grim financial situation'

India TV News  

The Kerala government has on Friday said firmly that there will be no tax reduction on the petrol and diesel prices, quoting the state's grim financial situation. Justifying the state's decision not to cut the additional tax on fuel, state Finance Minister K N Balagopal, while addressing a press conference said Kerala has not increased the state-tax on petrol and …

Fuel prices see further dip in these states as BJP and its allies cut costs of petrol by Rs 8, diesel by Rs 9
3 years, 2 months ago

Fuel prices see further dip in these states as BJP and its allies cut costs of petrol by Rs 8, diesel by Rs 9

Firstpost  

After duty changes, the costliest petrol and diesel is sold in Rajasthan at Rs 111.10 and Rs 95.71 a litre respectively New Delhi: Petrol price has been further reduced by as much as Rs 8.7 per litre and diesel by Rs 9.52 in BJP ruled states and UTs — from Ladakh to Puducherry — as they matched the central government’s …

Centre's Excise Duty Cut on Petrol, Diesel to Cost Rs 45,000 Cr to Exchequer: Report
3 years, 2 months ago

Centre's Excise Duty Cut on Petrol, Diesel to Cost Rs 45,000 Cr to Exchequer: Report

News 18  

The excise duty cuts on diesel and petrol will cost Rs 45,000 crore and lead to a 0.3 percentage point widening on the Centre's fiscal deficit, a foreign brokerage said on Thursday. Going by the overall consumption, the costs of the surprise move which came after months of concerns over high payouts at filling stations for the entire fiscal will …

Petrol, diesel price cut across country as Centre cuts excise duty, states reduce VAT. Details
3 years, 2 months ago

Petrol, diesel price cut across country as Centre cuts excise duty, states reduce VAT. Details

India TV News  

After Centre cut excise duty followed by several states reducing VAT, petrol price on Thursday was cut in the range of Rs 5.7 to Rs 6.35 per litre across the country and diesel rates by Rs 11.16 to Rs 12.88 as oil companies passed on a record reduction in excise duty rates to consumers. In Delhi, the reduction in petrol …

Petrol Price Can Come Down to Rs 75 if Brought Under GST, But There's Lack of Political Will: SBI Economists
3 years, 10 months ago

Petrol Price Can Come Down to Rs 75 if Brought Under GST, But There's Lack of Political Will: SBI Economists

News 18  

Petrol price can go down to Rs 75 a litre across the country if brought under the ambit of the Goods and Services Tax, but there is a lack of political will, which is keeping Indian oil product prices at one of the highest in the world, economists at SBI said on Thursday. Diesel will come at Rs 68 a …

No proposal to reduce tax on petrol, diesel: UP government
3 years, 10 months ago

No proposal to reduce tax on petrol, diesel: UP government

India TV News  

There is no proposal to reduce tax on petrol and diesel as revenue is needed to ensure betterment of health services and other development works due to the COVID-19 pandemic, the Uttar Pradesh government said on Thursday. Replying to Samajwadi Party member Narendra Verma during the question hour in the state Assembly, Cabinet Minister Satish Mahana said, "There is no …

For petrol, diesel price reduction, centre and state need to coordinate says RBI
3 years, 10 months ago

For petrol, diesel price reduction, centre and state need to coordinate says RBI

Hindustan Times  

Reserve Bank of India Governor Shaktikanta Das on Thursday said there is a need for coordinated action between the centre and state governments to reduce taxes on petrol and diesel prices. The governor said both the centre and the state governments have their revenue pressures and they are required to spend high sums of money to enable the country and …

Petrol touches ₹100/litre in some cities, here’s why it’s so costly
3 years, 10 months ago

Petrol touches ₹100/litre in some cities, here’s why it’s so costly

Live Mint  

Fuel prices are on the rise again. Part of the reason is recovering crude oil prices, even as central and state taxes remain a pain point. The elevated taxes kept fuel prices up in India even though crude oil prices had crashed and stayed low for much of 2020. Source: RBI, PPAC The current petrol price break-up in Delhi shows …

Fiscal deficit of states to hit peak of ₹8.7 lakh crore, says CRISIL
3 years, 11 months ago

Fiscal deficit of states to hit peak of ₹8.7 lakh crore, says CRISIL

The Hindu  

The States are headed for a fourfold expansion in their revenue deficit this fiscal over the last year due to far lesser tax collections, Crisil Ratings said in a report. “This will not only expand States’ aggregate gross fiscal deficit to an all-time high of ₹8.7 lakh crore, or 4.7% of GSDP, but also skew its composition towards revenue deficit …

State’s earnings to take a massive hit in 10 days
4 years, 9 months ago

State’s earnings to take a massive hit in 10 days

Deccan Chronicle  

Hyderabad: The 10-day lockdown announced by Chief Minister K. Chandrashekar Rao due to coronavirus will have a serious impact on finances of the state. The state government has projected `7,100 crore as tax revenues and `2,200 crore as non-tax revenue per month. The state government will thus lose GST, which will also have an effect on getting tax devolutions from …

Fiscal policy needs to be tightened at Centre, state-level in next financial year to avert growth drag
5 years, 11 months ago

Fiscal policy needs to be tightened at Centre, state-level in next financial year to avert growth drag

Firstpost  

A step back from fiscal rectitude at this point will exaggerate the uncertainties around the fiscal outlook for the medium term. Convention dictates that the next finance minister gets to make the final decisions about expenditure after a new government is formed and thus ‘interim budget’ replaces the annual Union budget in general election years. To meet the public debt-to-GDP …

Centre Slashes Petrol and Diesel Prices by Rs 2.50; 13 BJP-ruled States Match Cut to Give Relief of Rs 5
6 years, 3 months ago

Centre Slashes Petrol and Diesel Prices by Rs 2.50; 13 BJP-ruled States Match Cut to Give Relief of Rs 5

News 18  

New Delhi: The central government on Thursday gave relief to masses from skyrocketing fuel prices and cut petrol and diesel rates by Rs 2.50 a litre with effect from midnight. He also asked the states to match the cut announced by the Centre to give further relief and 13 BJP-ruled states – Gujarat, Goa, Uttar Pradesh, Jammu and Kashmir, Haryana, …

'Petrol, diesel prices not discussed in GST Council meet'
6 years, 3 months ago

'Petrol, diesel prices not discussed in GST Council meet'

India TV News  

Amid questions whether the government was considering to bring down the prices of petrol and diesel, Finance Minister Arun Jaitley said the issue was "not in the agenda" of the GST council meeting today. "It was not in the agenda," the finance minister said at a media briefing to a question on whether the government was considering any relief measure …

Falling rupee, rising crude prices to give states windfall in tax revenues to the tune of Rs 22,700 crore
6 years, 4 months ago

Falling rupee, rising crude prices to give states windfall in tax revenues to the tune of Rs 22,700 crore

Firstpost  

An increase of $1 a barrel in crude price translates into a Rs 1,513 crore revenue gain on an average to all major 19 states Mumbai: The continuing plunge in the rupee, coupled with rising crude oil prices, will give the states a windfall in tax revenues to the tune of Rs 22,700 crore over and above the budget estimates …

States make unexpected gains as common man bears brunt of rising fuel prices
6 years, 4 months ago

States make unexpected gains as common man bears brunt of rising fuel prices

India Today  

The daily rise in prices of petrol and diesel is making states richer while burning a hole in the common man's pocket. A study shows it takes 20.11 per cent of daily wages in India to afford a litre of petrol According to an estimate, that while the consumer, in the last six months, has been crushed under the Rs …

Govt rules out excise duty cut as petrol, diesel prices hit fresh high
6 years, 4 months ago

Govt rules out excise duty cut as petrol, diesel prices hit fresh high

India TV News  

A cut in taxes on petrol and diesel is ruled out for now as neither the central government nor some states have the appetite to stomach revenue loss from such a move, a top government official said Monday. Prices in Delhi, where rates are the cheapest among all metros and most state capitals because of lower VAT, saw petrol touch …

Govt in trouble over floundering economy?
6 years, 4 months ago

Govt in trouble over floundering economy?

Deccan Chronicle  

The Congress-led UPA government had approved the steepest ever hike in petrol prices across the country. While the silence is deafening, some BJP leaders whisper: “This is mainly because fall in Indian rupee and of course rise of crude at the global level.” In the penultimate year of its five-year term, the Modi government could be be in serious trouble …

Opinion: The urgent need for states to get fiscally fit
6 years, 5 months ago

Opinion: The urgent need for states to get fiscally fit

Live Mint  

The recent report, “State Finances: A Study of State Budgets 2018” by the Reserve Bank of India confirms what has been observed for a while; that the state of state finances is in “deep trouble” territory. States implementing wage increases reported a 28% growth in revenue expenditure while interest payments grew 16% driven by the market borrowing binge of recent …

RBI says fiscal position of states is under pressure again
6 years, 6 months ago

RBI says fiscal position of states is under pressure again

Live Mint  

Mumbai: Pay revisions, interest payments and farm loan waivers are stressing state government finances yet again, the Reserve Bank of India said in a report. States have budgeted a gross fiscal deficit of 2.6% of gross domestic product during FY19, with 11 states budgeting above 3%, RBI said in its annual report titled State Finances: A Study of Budgets. “With …

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