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New Delhi, May 6: Taking a cue from states, the Centre announced one of the steepest hikes in duties on petrol and diesel in the recent past, by raising it by Rs 10 and Rs 13 per litre, respectively, in a notification issued late on Tuesday.

Retail prices, however, will see no change as the price hike will be absorbed by oil marketing companies against the fall in crude prices.

Road and infrastructure cess was hiked by Rs 8 for petrol and diesel and the special additional excise duty (SAED) was hiked by Rs 2 per litre and Rs 5 per litre, respectively. While the road cess will only go into the Centre’s coffers, the hike on account of SAED will be passed on to states via devolution at 42 per cent. Hence, the states will get only Rs 0.84 per litre in case of petrol and Rs 2.1 in case of diesel.

The decision comes after several states increased the value added tax (VAT) on petrol and diesel making use of the lower price regime. The Delhi government on Tuesday increased VAT on petrol and diesel to 30 per cent each, from 27 and 16.75, respectively. As a result, the price of petrol in Delhi increased by Rs 1.67 to Rs 71.26 a litre and diesel by Rs 7.10 to Rs 69.29 in Delhi on Tuesday.

Amid falling international crude oil prices, the Centre introduced an enabling provision in March to raise excise duty on petrol and diesel by Rs 8 per litre in the Finance Act. The government had on March 14 raised excise duty on petrol and diesel by? 3 per litre each, which was to help raise an additional ?39,000 crore in revenue annually.

This duty hike included Rs 2 a litre increase in SAED and Rs 1 in road and infrastructure cess. It raised SAED to Rs 10 for petrol and Rs 4 for diesel. The limit has now been increased to Rs 18 a litre in case of petrol and Rs 12 in case of diesel by way of amendment of the Eighth Schedule of the Finance Act.

Economists said the move would impact retail inflation by over half a percentage point at least. “With lower consumption, there was loss of revenue for Centre and states, who earn Rs 6 trillion annually or Rs 50,000 crore monthly from fuel. Amid lockdown in April, the collection must have come down to just Rs 5,000 crore, and this will hold for May.

This means that Centre and states have lost 20 per cent of annual revenue from fuel. Hence, they have hiked duties to recover losses,” said Madan Sabnavis, chief economist, CARE Ratings. He added that the hike will impact inflation by at least 0.6-0.7 percentage points.

According to industry experts, an estimate of the additional government revenue cannot be made as the consumption of petrol and diesel has dropped to 40 per cent of what it was before the lockdown. The duty hike comes following a drop in international crude oil prices in April, owing to lower consumption figures globally. At 11.50 pm on Tuesday, Brent was priced at $30.67 a barrel, while West Texas Intermediate (WTI) crude was seen at $24.36 a barrel. On Monday, the Indian basket of crude oil was priced at $23.38 a barrel, after touching a 15-year low last month.

New Delhi, Jun 19: India on Friday added 13,586 new COVID-19 cases for the first time in a single day, pushing the tally to 3,80,532, while the death toll rose to 12,573 with 336 new fatalities, according to the Union Health Ministry data.

In some positive news, the number of recoveries crossed the two lakh-mark and stands at 2,04,710, while there are 1,63,248 total COVID-19 active cases, according to the updated official figure at 8 am.

One patient had migrated.

"Thus, around 53.79 percent patients have recovered so far," an official said.

The total number of confirmed cases include foreigners. 

India registered over 10,000 cases for the eighth day in a row.

Of the 336 new deaths reported till Friday morning, 100 were in Maharashtra, 65 in Delhi, 49 in Tamil Nadu, 31 in Gujarat, 30 in Uttar Pradesh, 12 each in Karnataka and West Bengal, 10 in Rajasthan, six in Jammu and Kashmir, five in Punjab, four each in Haryana and Madhya Pradesh, three in Telangana, two in Andhra Pradesh and one each in Assam, Jharkhand and Kerala.

Jan 6: India’s Finance Ministry has delivered a challenge to its revenue collectors: meet tax targets despite $20 billion of corporate tax cuts.

Through a video conference on Dec. 16, officials were exhorted to meet the direct tax mop-up target of 13.4 trillion rupees ($187 billion), a government official told reporters. Collection in the eight months to November grew at 5% from a year earlier, against the desired 17%.

The missive shows Prime Minister Narendra Modi’s urgent need to buoy public finances in a slowing economy where April-November tax collections were half the amount budgeted. Authorities withheld some payments to states and have capped ministries’ expenditure as the fiscal deficit ballooned beyond the target.

The government’s efforts to maintain its deficit goal goes against advice from some quarters, including central bank Governor Shaktikanta Das, who urged more spending to spur economic growth.

It’s uncertain though how much room Modi’s administration has to boost expenditure, given that it may already be borrowing as much as 540 billion rupees through state-run companies, a figure that isn’t reflected on the federal balance sheet. Uncertainty about public finances pushed up sovereign yields in November and December, compelling Das to announce unconventional policies to keep costs in check.

“This is not a time to conceal the fiscal deficit by off-budget borrowing or deferring payments,” said Indira Rajaraman, an economist and a former member of the Reserve Bank of India’s board. “If they were to stick to the target, that would be catastrophic because there is so much pump-priming that is needed right now.”

GDP grew 4.5% in the quarter ended September, the slowest pace in more than six years as both consumption and investments cooled in Asia’s third-largest economy. Only government spending supported the expansion, piling pressure on Modi to keep stimulating.

S&P Global Ratings warned in December it may downgrade India’s sovereign ratings if economic growth doesn’t recover. Government support seems to be waning now, with ministries asked to cap spending in the final quarter of the financial year at 25% of the amount budgeted rather than 33% allowed earlier. This new rule will hamstring sectors including agriculture, aviation and coal, where not even half of annual targets have been disbursed.

As the federal government runs short of money, it’s been delaying payouts to state administrations.

Private hospitals have threatened to suspend cash-less services to government employees over non-payment of dues, while a builder informed the stock exchange about delayed rental payments from no less than the tax office itself.

India is considering a litigation-settlement plan that will allow companies to exit lingering tax disputes by paying a portion of the money demanded by the government, the Economic Times newspaper reported Saturday.

The move will help improve the ease of doing business besides unlocking a part of the almost 8 trillion rupees ($111 billion) caught up in these disputes. The step, which is being considered as part of the annual budget, could also bridge India’s fiscal gap.

Finance Minister Nirmala Sitharaman has refused to comment on the deficit goal before the official budget presentation due Feb. 1.

A deviation from target, if any, “will need to be balanced with a credible consolidation plan further-out,” said Radhika Rao, an economist at DBS Group Holdings Ltd. in Singapore.