In order to give relief to the people who are facing all-round inflation, the Narendra Modi government at the Center on Saturday decided to reduce the excise duty from petrol and diesel. The government had decided to reduce the excise duty on petrol by Rs 8 per liter and on diesel by Rs 6 per liter.
This has brought relief to the general public. At the same time, the additional burden has increased on the central government. Let us know whether this reduction in excise duty will not create new trouble for the Modi government?
Union Finance Minister Nirmala Sitharaman said that due to this reduction in excise duty, the government will have to bear an additional burden of Rs 1 lakh crore. Let us tell you, in November last year, the Narendra Modi government at the Center had decided to cut excise duty before the assembly elections of five states including Uttar Pradesh.
Then there was a burden of Rs 1,20,000 crore on the exchequer. That is, combining these two deductions, there will be an additional burden of Rs 2,20,000 crore on the exchequer of the government.
The Government of India has definitely been successful in selling its stake in LIC. But the current market conditions and the performance of LIC have definitely eclipsed other disinvestment plans for a few months. At the same time, in LIC too, the government has sold only 3.5% stake instead of 5%.
Looking at the pattern of the last three years, the government has not got much success in raising money from public sector companies. Last fiscal, the government had set a target of raising Rs 1.75 lakh crore through disinvestment. Which was later reduced to Rs 78,000 crore. That is, even after the efforts of the government, investors are not very excited to buy government companies.
This year’s disinvestment target is Rs 65,000 crore, of which one third has been achieved. To meet the remaining target, the government will try to sell its stake to companies like Pawan Hans, BPCL, Central Electronics, Hindustan Zinc Limited and ITC.
At a time when the government has decided to cut excise duty and is finding it difficult to achieve the target of disinvestment, the question arises whether the government will be able to handle the subsidy burden. In defense of the collection of excise duty collected from petrol and diesel from the house to the road, the ministers of the central government used to say that the poor are getting its benefit.
A major part of the government’s budget goes to subsidies. On Saturday, the government announced a subsidy of Rs 200 on 12 cylinders to 9 crore Ujjwala gas beneficiaries. In such a situation, the question arises that apart from the new subsidy, under the burden of the old subsidy, will the development schemes be sacrificed somewhere?
Subsidies on some major schemes being given by the government
Scheme FY-2022-23 (Rs.) Previous FY-2021-22 (Rs.)
1- Food Subsidy 2,06831.09 2,86,469.11 (Revised)
2- Fertilizer (Manure) 1,05,222.32 1,40,122.32 (Revised)
3- Petroleum 5812.50 6516.92 (Revised)
Rs: Lakh Crore
Due to the war between Russia and Ukraine, there is a cloud of doubt in the market around the world. Where on the one hand inflation is increasing continuously around the world. On the other hand, the government is not able to supply essential goods. Due to which the crisis in front of many countries has deepened. The current situation in Sri Lanka is not hidden from anyone. In such a situation, when the clouds of economic crisis are hovering around the world, then how correct this decision is, it is a big question.
Where did the government get the courage to take this tough decision in this difficult time, then one answer can be GST. The month of April has been good for the government in terms of GST collection. The government had made a GST collection of Rs 1.68 lakh crore, breaking all the old records. The GST collection in April was Rs 26 lakh crore more as compared to March.