Hike In Excise Duty Aimed To Meet Budget Deficit, Says Oil Minister

NEW DELHI: A day after the government hiked excise duty on petrol and diesel for the second time in three weeks, oil minister Dharmendra Pradhan said the move was meant to shore up revenue to meet budget deficit without burdening the consumer.

“In legacy we inherited a bankrupt economy. We are committed to providing power to all, water to very village and primary healthcare. “For this we had to take certain steps (to mobilize money)... some steps have been taken without burdening the consumer,” he said.

The government had raised excise duty on petrol by 2.25 per litre and by 1 a litre on diesel but retail pump rates will not be increased as oil firms decided to absorb the duty change for the time being. The second excise duty hike in three weeks will help raise an additional 4,000 crore in four months to March as the government seeks to take advantage of a slump in global oil prices to shore up its revenues without stoking inflation.

Together with 1.50 a litre excise duty hike on both petrol and diesel with effect from 12 November, the government will mop up about 10,000 crore in remaining period of the current fiscal that will help contain budget deficit. Pradhan said if international oil prices continue to slide, the benefit will certainly be passed on to consumers.