Former planning commission member Kirit Parikh has suggested measures that can reduce petrol and diesel prices by Rs 5-6 without hurting the government revenues if a balanced approach is adopted. Parikh suggests that fuel prices can be cut without any adverse effect if states cut value-added tax (VAT) and the central government cuts excise duty by 10%.
Parikh also advocated artificial shoring up of the rupee by the RBI as it is a “counter-productive” measure. In an article titled ‘the oil & rupee problem’ for The Indian Express, he suggested a slew of measures to fix the double whammy hurting the Indian economy.
Petrol and diesel prices:
As oil prices surged up to Rs 85 per barrel this year, Parikh suggested that fuel prices can still be brought down by Rs 5-6. According to him, the states’ annual revenue would increase by 10% to 16.5% depending on the movement by both crude oil price and rupee. Read More
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