Centre’s excise duty cut on petrol, diesel to cost exchequer Rs 45,000 crore, says Nomura

The excise duty cuts on diesel and petrol will cost Rs 45,000 crore and lead to a 0.3 percentage point widening on the Centre’s fiscal deficit, a foreign brokerage said on Thursday. Going by the overall consumption, the costs of the surprise move – which came after months of concerns over high payouts at filling stations – for the entire fiscal will come at Rs 1 lakh crore or 0.45 per cent of GDP, economists at Japanese brokerage Nomura said in a report.

For the remaining months of the ongoing FY22, the cost will come at Rs 45,000 crore, which leads to an upward review of the fiscal deficit target.