Amid rising fuel prices, the industry chamber Associated Chambers of Commerce and Industry of India (ASSOCHAM) has said that in order to check the spurt in fuel prices, reducing taxes is the best solution and this will also enormously help India on the exports front. It added that bring down current account deficit, will make the country’s exports competitive and the nation may also no longer see the rupee depreciating.
Suggesting further measures to the Centre, the industry chamber has said that there is need to bring in oil products under the ambit of the Goods and Services Tax (GST), so that the country’s fuel prices match international rates. It also said that the prices then do not have to be administered by the government and people would treat oil as just another commodity which depends on international prices. It added that higher oil prices significantly impact not just India’s economy but household budgets as well as it leads to increase in cost of transportation and therefore impacts a lot of other products in the inflation basket.
Noting that higher crude prices adversely affect twin deficits -- fiscal and current account deficits of the economy, which will have major impact on monetary policy, consumption and investment behaviour in the economy, ASSOCHAM said that reduction in oil duties will be of big advantage to the country’s exports. Besides, the Centre had earned a whopping Rs 2.4 lakh crore while the states earned Rs 1.6 lakh crore as excise duty from the petroleum sector in FY17 and the figure is set to increase further this fiscal.