Tax cut on fuels positive for inflation management: RBI Governor Shaktikanta Das

Reserve Bank of India (RBI) Governor Shaktikanta Das said that the recent cut in excise duty on diesel and petrol as well as better management of supply-side issues on the food front have contained inflationary expectations.

New Delhi: Reserve Bank Governor Shaktikanta Das on Wednesday ruled out upside risks to the 5.3 per cent inflation forecast for the current fiscal, saying the recent cut in excise duty on diesel and petrol as well as better management of supply-side issues on the food front have contained inflationary expectations.

These measures are significantly positive for inflation management, he said.

After months of calls for reducing taxes on fuels, the government, last week, cut the excise duty on diesel and petrol by Rs 10 and Rs 5 per litre, respectively. Most of the states followed suit and the cumulative impact is that in most markets, petrol is ruling under Rs 100 a litre now. Even at the lowered rates, the duties and taxes constitute over 50 per cent of the retail price.