Budget 2025 : Demand to reduce excise duty on petrol and diesel...

Call to lower excise duty on petrol and diesel, taxpayers need relief from tax burden

Budget 2025

The decline in consumption caused by inflation in the country has heightened industry concerns. The reduction in GDP growth rate during the second quarter of the current financial year 2024-25 confirms this trend. In this context, attention is focused on the budget to be presented for the financial year 2025-26 on February 1, 2025, anticipating what Finance Minister Nirmala Sitharaman will announce to boost demand and consumption. The country's largest business chamber, CII, has recommended that the government lower the excise duty on petrol and diesel in the budget to encourage consumption.

Suggestion to reduce excise duty on petrol and diesel

For the budget set to be presented for the financial year 2025-26, CII has provided a list of recommendations to Finance Minister Sitharaman. The most notable suggestion is to boost demand and consumption. To achieve this, the business chamber has advised the Finance Minister to lower the excise duty on petrol and diesel, aiming to enhance consumption among the low-income segment. CII believes that high fuel prices contribute to inflation.

Crude oil is cheap but petrol and diesel are not cheap

The Confederation of Indian Industry (CII) states that central excise duty constitutes 21 percent of petrol prices and 18 percent of diesel prices. Although global crude oil prices have dropped by 40 percent since May 2022, petrol and diesel prices remain unchanged. CII suggests that lowering excise duty could help curb inflation and boost people's disposable income. CII Director General Chandrajit Banerjee emphasized the importance of enhancing domestic consumption for India's swift growth, noting that inflation has diminished people's purchasing power.

Reduced tax burden on taxpayers

CII has called for significant relief for taxpayers. The business chamber has proposed lowering income tax rates for individuals with annual earnings up to Rs 20 lakh. The chamber believes this measure will boost demand and consumption, resulting in higher economic growth and increased tax revenue for the government.