Daijiworld Media Network

New Delhi, Jun 29: Union finance minister Pranab Mukherjee has withstood widespread demand for the downward revision of prices of diesel, cooking gas and kerosene, which were upwardly revised recently. While declining chances of rolling back these prices, he clarified that the government’s decision to bring down duties on these goods will ease burden on the consumers, but will not have any adverse affect on the next budget or the current year’s deficit.

Price of diesel was hiked by three rupees a litre, cooking gas, by Rs 50 per cylinder, and kerosene, by two rupees a litre. The revision was necessitated because of the rising crude oil prices globally, the government had said, in justification of this increase.

The Indian finance minister is here to take part in the ‘US-India Economic and Financial Partnership’. The programme has been organized jointly by the Confederation of Indian Industry, and Brookings Institute, Washington.

To partially soothe the overall affect caused by the increased prices these commodities at the retail level, the central government has declared measures like reduction of excise and customs duties on crude oil and some other goods. The union government, which wants the states also to follow suit, has already written to all the Chief Ministers, asking them to reduce sales tax on petroleum products. The union government expects to lose about Rs 49,000 crore in revenue because of this measure. The government has already outlined its plans to bring down the fiscal deficit down to 4.6 percent from 4.7 percent last year, and 6.3 percent in 2009-10.

Some of the state governments have fallen in line, and taken measures like withdrawal of value added tax to ease the burden on consumers.

The finance minister hopes to bridge the yawning gap caused in the revenue through this gesture, through disciplined tax collection and better compliance of tax collection and monitoring procedures.