Further cut in state VAT on fuels can soften inflationary pressure: RBI Guv

A further reduction of state value added taxes on petrol and diesel across the country would certainly contribute to softening of the inflationary pressures as well as the inflationary expectations, said the Reserve Bank of India Governor Shaktikanta Das on Wednesday.

Das said in his remarks while spelling out the outcome of the ongoing monetary policy review meeting that started on Monday.

“Our quick survey of urban households undertaken after the excise duty cuts on petrol and diesel on May 21, 2022 shows a significant moderation in their inflation expectations: declines of 190 basis points in their three months ahead expectations and 90 basis points in one year ahead expectations,” said Das.