Excise cut on petrol, diesel to cost government Rs 45,000 crore: Nomura

The excise duty cut of Rs 5 on petrol and Rs 10 on diesel by the government to offset the impact of rising crude oil prices will lead to a revenue loss of Rs 45,000 crore, or 0.2 per cent of gross domestic product (GDP), in the remaining months of fiscal 2021-22 (FY22), suggests a note by Nomura. The research and broking house also lowered its consumer price inflation (CPI) projection as well given the development.

“The tax cuts could cost the government Rs 1 trillion (0.45 per cent of GDP) on an annual basis in terms of lost revenues and around Rs 45,000 crore (0.2 per cent of GDP) for the remaining months in FY22,” the note said.