To combat inflation, the government may lower the tax on petrol prices: Report
In order to curb inflation, the government may lower the tax on petrol prices.
In brief, the government considers lowering import tariffs and taxing petrol less.
several departments will contribute Rs 1 lakh crore to handle food and fuel expenditures.
In a few weeks, Prime Minister Narendra Modi will decide on fund reallocation.
The government is exploring a strategy to lower the taxes that are levied on gas prices in addition to lowering import levies on pricey goods like wheat and cooking oil.
According to a Bloomberg News story that cited sources with knowledge of the situation, government officials are discussing a plan to reallocate up to Rs 1 lakh crore from the budgets of different ministries in order to rein in rising food and fuel prices.
This report was released a few days after Prime Minister Narendra Modi promised to combat the nation's increasing inflation during his Independence Day speech.
According to the persons cited in the story, Prime Minister Narendra Modi will decide on the fund reallocation in the upcoming weeks. The measures may include lowering fuel prices and lowering import tariffs on cooking oil and wheat.
Since 2022, India has struggled with inflation, with just a little respite from February to June of this year.
If the government adopts new measures to combat inflation, it would be the second year in a row that changes were required. It should be mentioned that in order to protect consumers from rising inflation last year, the government spent an additional Rs 2 lakh crore.
Households are feeling the heat of inflation from all directions, not just from the cost of fuel. This includes the cost of tomatoes, other fruits and vegetables, milk, and even basic grains like wheat and rice. In July, India's retail inflation reached a 15-month high of 7.4% as a result of all of these causes.
In August, analysts and even the Reserve Bank of India (RBI) anticipate that inflation would remain high. After that, the trajectory will depend on how the weather develops.
As the BJP-led NDA government prepares for a number of vital state elections leading up to the crucial national elections in 2024, an increase in inflation could provide a significant issue.
The poorer populace, which has always supported the ruling party because of its emphasis on welfare programmes and rural development, might be seriously harmed if inflation spirals out of control further.