Cut in fuel excise duty to cost govt Rs 45k cr: Report

MUMBAI: The excise duty cuts on diesel and petrol will cost Rs 45,000 crore and lead to a 0.3 percentage point widening in the Centre’s fiscal deficit, a foreign brokerage said on Thursday. Going by the overall consumption, the cost of the surprise move, which came after months of concerns over high payouts at filling stations, for the entire fiscal will come to Rs 1 lakh crore, or 0.6% of GDP, economists at Japanese brokerage Nomura said in a report.
For the remaining months of the ongoing FY22, the cost will be Rs 45,000 crore, which leads to an upward review of the fiscal deficit target. The brokerage said it now expects the fiscal deficit to be 6.5% as against the earlier expectation of 6.2% and underlined that it will still be lower than the budgeted 6.8% target.